WEBVTT - 1-9-26 America's Truckin' Network

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<v Speaker 1>This is America's Trucking Network with Kevin Gordon.

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<v Speaker 2>Welcome aboard, Thanks for tuning in on this Friday morning. Well,

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<v Speaker 2>now that the dust has settled from the holidays and

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<v Speaker 2>the numbers coming in as far as retail sales, we're

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<v Speaker 2>starting to see those which are positive.

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<v Speaker 3>We've been hearing over the last couple of weeks.

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<v Speaker 2>Volatility as far as employment numbers kind of sketchy always,

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<v Speaker 2>volatility range around the holidays and difficult to pin down. Well,

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<v Speaker 2>we got one of the first I guess after the

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<v Speaker 2>holidays reading as far as unemployment is concerned.

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<v Speaker 3>And this is interesting.

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<v Speaker 2>Once again, I look at when the reports come out,

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<v Speaker 2>I take a look at, I do a search, and

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<v Speaker 2>then I see what headlines are out there. And as always,

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<v Speaker 2>it seems that certain media decides that they're going to

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<v Speaker 2>shade things one way. They're not going to straight up report.

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<v Speaker 2>Let's just get into it here. Let's see.

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<v Speaker 3>I'll get to the worst one first.

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<v Speaker 2>This is from Breaking the News, which is basically what

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<v Speaker 2>they've done. US initial jobless claims up by eight thousand

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<v Speaker 2>to two hundred and eight thousand.

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<v Speaker 3>Sounds bad unless you put it in context.

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<v Speaker 2>FX Street US initial jobless claims rose to two hundred

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<v Speaker 2>and eight thousand last week.

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<v Speaker 3>One that's not one. That's pretty decent.

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<v Speaker 2>US initial job is claims two hundred and eight thousand

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<v Speaker 2>versus two hundred and ten thousand estimated, which is not

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<v Speaker 2>bad investing dot Com initial job is claims.

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<v Speaker 3>Rise but fall short of forecast. And then.

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<v Speaker 2>Ms N their news headline says weekly initial job is

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<v Speaker 2>claims rise less than expected. Now, probably one of the

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<v Speaker 2>best ones, which was kind of a surprise to me,

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<v Speaker 2>was Reuters their headline, US week jobless claims increase marginally,

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<v Speaker 2>which is what in fact the headlines should be, and

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<v Speaker 2>when you get into the numbers, that's exactly what it is.

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<v Speaker 2>Number of Americans filing for applications for unemployment benefits rose

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<v Speaker 2>moderately last week, suggesting that layoffs were relatively low at

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<v Speaker 2>the end of twenty twenty five, though demand for labor

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<v Speaker 2>remains sluggish. Initial claims first state unemployment benefits rose eight

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<v Speaker 2>thousand to a seasonally adjusted two hundred and eight thousand

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<v Speaker 2>for the week end in December twenty seventh, according to

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<v Speaker 2>the Labor Department. Economists polled by Reuters had forecasted two

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<v Speaker 2>hundred and ten thousand claims for last week. Now I

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<v Speaker 2>saw another report that said that they had forecasted two

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<v Speaker 2>hundred and thirteen thousand. So even they can't come up

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<v Speaker 2>with their can't be consistent with what they expected it

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<v Speaker 2>to be. Claims have been chopping, and this is let

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<v Speaker 2>me see, claims have been chopping in recent weeks amid

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<v Speaker 2>challenges adjusting the data for seasonal fluctuations around the year

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<v Speaker 2>end holiday season. Although you know every year the holiday

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<v Speaker 2>season comes and goes, so they're acting as though that

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<v Speaker 2>this is the first time they've had this kind of

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<v Speaker 2>a situation, rather than going back and talking about trends

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<v Speaker 2>in the past. Through the volatility, layoffs have remained low

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<v Speaker 2>by historical standards. Now that's a key point because what

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<v Speaker 2>we keep hearing is that the labor market is weak.

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<v Speaker 2>And again, if the labor market is weak, people aren't

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<v Speaker 2>going to be spending a lot of money. People aren't

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<v Speaker 2>going to have money to spend, which means that they're

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<v Speaker 2>going to be going to retailers less, which means that

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<v Speaker 2>retailers are going to be ordering less, which means that

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<v Speaker 2>trucks aren't going to have the tonnage that they would

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<v Speaker 2>normally have. But the fact that unemployment is low and

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<v Speaker 2>that these layoffs are minimal. People are out there, people

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<v Speaker 2>are spending robustly and keeps the wheels of the economy

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<v Speaker 2>moving and the wheels of the trucking industry, which.

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<v Speaker 3>Is good news.

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<v Speaker 2>Layers have been reluctant to boost headcount amid tariff related

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<v Speaker 2>uncertainty and growing popularity of artificial intelligence, but they have

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<v Speaker 2>not engaged in mass firings and workers, keeping the labor

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<v Speaker 2>market in a state of paralysis, which is contrary to

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<v Speaker 2>what we saw yesterday when we talked about the ADP numbers.

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<v Speaker 2>We saw them with private firms, private payrolls that they

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<v Speaker 2>that they managed was up significantly more than what they

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<v Speaker 2>had expected. And we saw increases in the leisure and

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<v Speaker 2>hospitality industry, transportation and onto some of these others. And

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<v Speaker 2>they were saying that most of the increases came from

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<v Speaker 2>small businesses less than five hundred employees. So that is

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<v Speaker 2>in contrast to what they're saying here that many have

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<v Speaker 2>not engaged in hiring the popularity and they're holding back. Again,

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<v Speaker 2>maybe there's a cross current, maybe there's you know, the

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<v Speaker 2>data that comes in for one report over is fall

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<v Speaker 2>short of what is available to another report, and the

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<v Speaker 2>other report may be a little bit more accurate, but

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<v Speaker 2>I would.

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<v Speaker 3>Tend to lean on the side of ADP.

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<v Speaker 2>Again, as I pointed out yesterday, the fact that they

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<v Speaker 2>were a payroll processing firm, they would know the number

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<v Speaker 2>of checks that they issued last week versus the week before,

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<v Speaker 2>the week before, the week before that, And so if

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<v Speaker 2>they're not seeing any major decreases, and they're in fact

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<v Speaker 2>seeing increases, I think I would rely on those numbers

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<v Speaker 2>because actually they have the head counts where basically the

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<v Speaker 2>check counts in terms of how many checks they're sending out.

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<v Speaker 2>While a separate report from global outplacement firm Challenger, Great

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<v Speaker 2>and Christmas showed layoffs announced by US based employers jumped

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<v Speaker 2>fifty eight percent to a five year high of one

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<v Speaker 2>point two one point two six million in twenty twenty five.

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<v Speaker 2>Cost cutting by the federal government and technology companies accounted

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<v Speaker 2>for the bulk of the planned reductions.

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<v Speaker 3>Now again, let's hold on to that thought.

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<v Speaker 2>According to Andy Challenger, chief revenue officer Challenger Gray and Christmas,

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<v Speaker 2>he said technology has been pivoting to both developing and

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<v Speaker 2>implementing artificial intelligence much more quickly than any other industry This,

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<v Speaker 2>coupled with over hiring over the last decade, created a

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<v Speaker 2>wheak wave of job loss in the industry. Hold on

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<v Speaker 2>to that thought as far as Challenger Gray and Christmas

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<v Speaker 2>talking about the US layoffs announced by US based employers.

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<v Speaker 3>Okay, we'll come back to this.

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<v Speaker 2>Hiring plans dropped thirty four percent to five hundred and

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<v Speaker 2>seven thousand almost five hundred and eight thousand last year,

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<v Speaker 2>the lowest level since twenty ten. Lackluster hiring means unemployed

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<v Speaker 2>people are experiencing longer bouts of joblessness. The number of

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<v Speaker 2>people receiving unemployment benefits for after an initial week of aid,

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<v Speaker 2>a proxy for hiring, increase fifty six thousand to a

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<v Speaker 2>seasonally adjusted one point nine to one million. Now that

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<v Speaker 2>has been up, down, up, down, somewhere around one point

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<v Speaker 2>eight nine and one point nine to one million over

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<v Speaker 2>the last month or so. The government reported on Wednesday

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<v Speaker 2>the job openings dropped by fourteen dropped to a fourteen

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<v Speaker 2>month low in November. There were point nine to one

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<v Speaker 2>job openings for every unemployed person in November, the lowest

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<v Speaker 2>level seen since March of twenty twenty one, and down

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<v Speaker 2>from ninety seven point ninety seven in October. So for

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<v Speaker 2>every person that's out there, there's point nine to one jobs.

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<v Speaker 2>There's nine tens of one job for every person out there.

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<v Speaker 2>So if the people would go out and look for

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<v Speaker 2>the jobs, they may be looking in the wrong area,

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<v Speaker 2>or it may be a situation if that's not a

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<v Speaker 2>good fit. It's maybe either above their skill level or

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<v Speaker 2>below their skill level and would not be something that'd

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<v Speaker 2>be a good fit. So that would account for a

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<v Speaker 2>lot of that. Now, let me see if there's any

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<v Speaker 2>other gems in here. Non farm payrolls probably increase, Okay,

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<v Speaker 2>And this is what's interesting again, they get into speculation.

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<v Speaker 2>The claims data have no bearing on December's employment report

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<v Speaker 2>that is due out and do to be released later

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<v Speaker 2>on today on Friday. They go in here and they

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<v Speaker 2>speculate nonfarm payrolls probably increase sixty thousand jobs last month

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<v Speaker 2>after raising sixty four thousand in November. And they're talking

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<v Speaker 2>about possibility of the unemployment rate coming down, which is

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<v Speaker 2>what I've been talking about. November unemployment rate was partially

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<v Speaker 2>distorted by the forty three day long federal government shutdown,

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<v Speaker 2>you mean the Schumer shutdown, which also prevented the collection

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<v Speaker 2>of household data for October. The unemployment rate for October

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<v Speaker 2>was not published for the first time, and the government

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<v Speaker 2>started tracking that number back in nineteen forty eight. So

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<v Speaker 2>according because of Chuck Schumer's Schumer shut down, we didn't

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<v Speaker 2>get that information as we normally get for the first

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<v Speaker 2>time since nineteen forty eight.

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<v Speaker 3>Thank you, Chuck.

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<v Speaker 2>Some other stories having to do with unemployment those are

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<v Speaker 2>kind of interesting and we'll get to those coming up.

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<v Speaker 2>I'm Kevin Gordon, America's truck In Network seven hundred WLW.

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<v Speaker 1>This is the racing report on America's Trucking Network on

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<v Speaker 1>seven hundred WLW.

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<v Speaker 4>Seven time NASCAR Cup Series champion in Hall of Famer

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<v Speaker 4>Jimmy Johnson will utilize the open Exemption provisional to guarantee

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<v Speaker 4>Johnson spot as the forty first car in the twenty

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<v Speaker 4>twenty six Daytona five hundred, which is thirty seven days away.

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<v Speaker 4>Johnson says he was also Johnson will also return to

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<v Speaker 4>the NASCAR Craftsman Truck Series for its inaugural race at

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<v Speaker 4>Naval Base Coronado in San Diego in June. Hendrick Motorsports

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<v Speaker 4>has partnered with Atrium Health for their team wellness The

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<v Speaker 4>NASCAR Cup Series tests set for North Wilkesboro to work

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<v Speaker 4>on the short next Tuesday, will include drivers Ross Chastain,

0:10:04.360 --> 0:10:08.920
<v Speaker 4>Daniel Suarez, Kyle Busch, Chase Elliott, aj Allmendinger, among others.

0:10:09.240 --> 0:10:11.840
<v Speaker 4>Er mclaar and IndyCar teams have a deal with regional

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<v Speaker 4>airline Republic Airlines for transportation to the races, and IndyCar

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<v Speaker 4>driver Scott McLoughlin will race in the upcoming Rolex twenty four,

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<v Speaker 4>joining fellow drivers Alex Palo, Scott Dixon and Will Power

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<v Speaker 4>in the field.

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<v Speaker 1>This is the racing report on America's drug A Network

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<v Speaker 1>on seven hundred WLW.

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<v Speaker 5>Have a nice weekend, Seg Dennison, a t N. Running

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<v Speaker 2>Kevin Gordon, America Instructing Network seven hundred WLW. Just so

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<v Speaker 2>you can feel a little sorry for me here, because

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<v Speaker 2>I dig through these numbers. I read these stories and

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<v Speaker 2>then come up with the stories for this show. And

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<v Speaker 2>sometimes it's a little painful to read some of these

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<v Speaker 2>stories because of the how should I say, the lack

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<v Speaker 2>of intelligence put into this, And yet.

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<v Speaker 3>Those are the things that start to make some headlines.

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<v Speaker 2>This is from investing dot Com, of all people, this

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<v Speaker 2>story almost seems like it was written by an amateur,

0:11:47.240 --> 0:11:50.680
<v Speaker 2>somebody that has just that this was their first job

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<v Speaker 2>assignment initial.

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<v Speaker 3>Listen to some of these phrases in here.

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<v Speaker 2>The latest data on initial jobless claims, a key indicator

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<v Speaker 2>of the health of the US labor market that got

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<v Speaker 2>that as of of a boiler plate, I'm sure, has

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<v Speaker 2>been released showing an uptick in the number of individuals

0:12:10.400 --> 0:12:14.480
<v Speaker 2>filing for unemployment insurance for the first time. The actual

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<v Speaker 2>number of new jobless claims stood at two hundred and

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<v Speaker 2>eight thousand according to the report, This figure, while higher

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<v Speaker 2>than the previous week, fell short of economists forecast of

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<v Speaker 2>two hundred and thirteen. See there is no context in

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<v Speaker 2>terms of how this plays into where the jobless initial

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<v Speaker 2>jobless claims have been over a period of time, which

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<v Speaker 2>is generally between what we've been looking at, is between

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<v Speaker 2>two hundred and ten and two hundred and fifty thousand.

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<v Speaker 2>So at two hundred and eight it's below the low end,

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<v Speaker 2>but of course you're not going to get that from this,

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<v Speaker 2>I guess, amateur or whatever. Compared to the previous week's

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<v Speaker 2>figure of two hundred thousand, the latest data shows an

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<v Speaker 2>increase of eight thousand new claims.

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<v Speaker 3>This represents four percent rise in.

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<v Speaker 2>The initial jobless claims, signaling a slight slowdown in the

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<v Speaker 2>labor market. However, it's important to note that the weekly

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<v Speaker 2>figures can be volatile and are often subject to substantial revisions. Again,

0:13:15.400 --> 0:13:18.960
<v Speaker 2>almost like a rookie situation. They're reading that now, this

0:13:19.440 --> 0:13:23.360
<v Speaker 2>is an interesting take on this and digging into some

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<v Speaker 2>of these numbers and digging into some of these reports.

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<v Speaker 3>I mentioned yesterday when.

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<v Speaker 2>We were talking about the job increases from ADP in

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<v Speaker 2>their reporting, and they said in one of the sectors

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<v Speaker 2>that even though there was job increases in hospitality, healthcare

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<v Speaker 2>and so on, and even in transportation, it was offset

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<v Speaker 2>by decreases in business services. Professionals and in data processing

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<v Speaker 2>in technical areas. I mentioned at the time because I

0:13:55.280 --> 0:13:58.240
<v Speaker 2>had read something along the line that said that is

0:13:58.280 --> 0:14:02.240
<v Speaker 2>a possibility that some of these companies had, you know,

0:14:02.400 --> 0:14:06.120
<v Speaker 2>in order to develop AI, that as they were doing it,

0:14:06.160 --> 0:14:08.720
<v Speaker 2>as they were you know, coding, and they were getting

0:14:08.720 --> 0:14:11.600
<v Speaker 2>it launched, and then the implementation of it, they may

0:14:11.640 --> 0:14:14.480
<v Speaker 2>have overhired. And so this is just a leveling of

0:14:14.520 --> 0:14:17.560
<v Speaker 2>the playing field. Now, this is interesting. AI layoffs are

0:14:17.600 --> 0:14:22.000
<v Speaker 2>looking more like more like corporate fiction that's masking a

0:14:22.120 --> 0:14:26.680
<v Speaker 2>darker reality. This is according to Oxford Economics. Despite the

0:14:26.800 --> 0:14:31.000
<v Speaker 2>breathless headlines warning of robot takeover in the workforce, a

0:14:31.080 --> 0:14:35.080
<v Speaker 2>new research briefing from Oxford Economics cast doubts on the

0:14:35.200 --> 0:14:41.080
<v Speaker 2>narrative that artificial intelligence is currently causing mass unemployment. According

0:14:41.160 --> 0:14:44.640
<v Speaker 2>to the firm's analysis, quote, firms don't appear to be

0:14:44.680 --> 0:14:50.280
<v Speaker 2>replacing workers at with AI in a significant scale, suggesting

0:14:50.360 --> 0:14:54.120
<v Speaker 2>instead that companies may be using the technology as a

0:14:54.400 --> 0:14:59.880
<v Speaker 2>cover for routine head count reductions. Just like back to

0:15:00.080 --> 0:15:03.960
<v Speaker 2>into pandemic, when we heard about supply chain issues, you know,

0:15:04.040 --> 0:15:06.800
<v Speaker 2>after coming out of that that a lot of that

0:15:07.000 --> 0:15:11.560
<v Speaker 2>possibly had to do with not knowing how much business

0:15:11.640 --> 0:15:14.720
<v Speaker 2>was going to come back to a particular company, like

0:15:14.800 --> 0:15:19.280
<v Speaker 2>a restaurant or retailer, having been closed for several months

0:15:19.440 --> 0:15:22.160
<v Speaker 2>before they could get back and open, and the fact

0:15:22.240 --> 0:15:25.440
<v Speaker 2>that they go out and try to rehire some of

0:15:25.440 --> 0:15:28.680
<v Speaker 2>the employees that they had. So there were staffing shortages

0:15:28.720 --> 0:15:32.640
<v Speaker 2>because people were making more money staying on unemployment and

0:15:32.680 --> 0:15:35.880
<v Speaker 2>the stimulus checks as opposed to getting back to work.

0:15:36.200 --> 0:15:39.640
<v Speaker 2>So there were a difficulty filling these slots. And as

0:15:39.640 --> 0:15:42.800
<v Speaker 2>you may remember that some of these staffs were low,

0:15:43.280 --> 0:15:47.840
<v Speaker 2>and so because the staffs were low, they of course

0:15:47.920 --> 0:15:50.960
<v Speaker 2>didn't have enough people to handle the volume of business

0:15:50.960 --> 0:15:55.640
<v Speaker 2>they had. And because they're ordering techniques were a little skewed,

0:15:55.680 --> 0:15:58.360
<v Speaker 2>they're a little rusty, they would run out of stuff,

0:15:58.480 --> 0:16:01.360
<v Speaker 2>but of course they'd blame it on supply chain issues,

0:16:01.880 --> 0:16:05.600
<v Speaker 2>just like in so many instances. You know, if companies

0:16:06.000 --> 0:16:09.760
<v Speaker 2>last year were raising prices, they would claim it had

0:16:09.800 --> 0:16:12.200
<v Speaker 2>to do with tariffs. But when you dug into the

0:16:12.240 --> 0:16:15.000
<v Speaker 2>numbers and you looked at what they were doing had

0:16:15.080 --> 0:16:17.240
<v Speaker 2>nothing to do with tariffs. A lot of the stuff

0:16:17.280 --> 0:16:21.280
<v Speaker 2>that they raised prices on were domestically produced items. They

0:16:21.400 --> 0:16:24.800
<v Speaker 2>just wanted to sneak in a price increase and blame

0:16:24.880 --> 0:16:28.600
<v Speaker 2>it on the tariffs so situation here as far as

0:16:29.000 --> 0:16:32.200
<v Speaker 2>certain layoffs and a January seventh report, the research firm

0:16:32.560 --> 0:16:37.000
<v Speaker 2>argued that while anecdotal evidence of job displacement exists, the

0:16:37.040 --> 0:16:41.520
<v Speaker 2>macroeconomic data does not support the idea of a structural

0:16:41.640 --> 0:16:46.560
<v Speaker 2>shift in employment caused by automation. Instead, it points to

0:16:46.600 --> 0:16:48.960
<v Speaker 2>a more cynical corporate strategy.

0:16:50.080 --> 0:16:50.480
<v Speaker 3>Quote.

0:16:50.800 --> 0:16:54.720
<v Speaker 2>We suspect some firms are trying to dress up layoffs

0:16:55.040 --> 0:16:59.160
<v Speaker 2>as good news stories rather than bad news such as

0:16:59.600 --> 0:17:03.680
<v Speaker 2>pass over hiring, which is what I mentioned last yesterday

0:17:04.920 --> 0:17:09.240
<v Speaker 2>into this. Primary motivation for this rebranding of job cuts

0:17:09.240 --> 0:17:14.520
<v Speaker 2>appears to be investor relations. The report notes that attributing

0:17:14.800 --> 0:17:21.080
<v Speaker 2>staff reductions to AI adoption conveys a more positive message

0:17:21.280 --> 0:17:25.639
<v Speaker 2>to investors than admitting the traditional business failures such as

0:17:25.760 --> 0:17:30.320
<v Speaker 2>weak consumer demand or excessive hiring in the past. By

0:17:30.359 --> 0:17:35.840
<v Speaker 2>framing layoffs as a technological pivot, companies can present themselves

0:17:35.880 --> 0:17:42.840
<v Speaker 2>as forward thinking innovators rather than business struggling with cyclical downturns.

0:17:42.880 --> 0:17:48.399
<v Speaker 2>In a recent interview, Wharton management professor Peter Cappelli told

0:17:48.520 --> 0:17:53.760
<v Speaker 2>Fortune that he's seen research about how because markets typically

0:17:53.880 --> 0:18:01.240
<v Speaker 2>celebrate news of job cuts, firms announced phantom layoffs. So

0:18:02.440 --> 0:18:05.000
<v Speaker 2>if you notice when companies are you know, trying to

0:18:05.200 --> 0:18:08.000
<v Speaker 2>you know, boost up their stock, they will announce, well,

0:18:08.200 --> 0:18:11.840
<v Speaker 2>we're going to we're going to announce a certain number

0:18:11.880 --> 0:18:15.040
<v Speaker 2>of layoffs. And then the investors look at that and say, well,

0:18:15.040 --> 0:18:17.680
<v Speaker 2>they're being very good stewards of our money. They are

0:18:18.280 --> 0:18:21.520
<v Speaker 2>trimming you know, their employees and they're going to be

0:18:21.560 --> 0:18:24.320
<v Speaker 2>more profitable, which means that our stock will be more

0:18:24.560 --> 0:18:27.160
<v Speaker 2>and then that boosts up the stock. But as they

0:18:27.200 --> 0:18:30.760
<v Speaker 2>talk about here phantom layoffs. Now, I want to take

0:18:30.800 --> 0:18:35.040
<v Speaker 2>you back to the story we had initially talking about

0:18:35.359 --> 0:18:40.159
<v Speaker 2>jobless claims increase marginally. In that story we talked about

0:18:40.560 --> 0:18:46.160
<v Speaker 2>Andy Challenger, Chief Revenue Officers Challenger Gray and Christmas. They

0:18:46.200 --> 0:18:51.200
<v Speaker 2>were talking about how, let me see showed layoffs.

0:18:50.880 --> 0:18:53.440
<v Speaker 3>Announced by US.

0:18:52.600 --> 0:18:56.880
<v Speaker 2>Employers jumped fifty eight percent to a five year high

0:18:56.880 --> 0:18:58.200
<v Speaker 2>of one point two million.

0:18:58.640 --> 0:19:00.760
<v Speaker 3>They said, the layoff.

0:19:00.640 --> 0:19:06.399
<v Speaker 2>Announced by US based employers, Now those may not have

0:19:06.520 --> 0:19:07.080
<v Speaker 2>come true.

0:19:07.440 --> 0:19:08.120
<v Speaker 3>They may have.

0:19:08.160 --> 0:19:11.320
<v Speaker 2>Been as they refer to in this story we're talking

0:19:11.320 --> 0:19:17.120
<v Speaker 2>about that they actually are phantom layoffs trying to stimulate

0:19:17.480 --> 0:19:18.479
<v Speaker 2>the stock market.

0:19:18.960 --> 0:19:20.920
<v Speaker 3>Isn't that interesting? Okay?

0:19:21.280 --> 0:19:25.680
<v Speaker 2>Investors typically celebrate news of job cuts, firms announce phantom

0:19:25.760 --> 0:19:32.040
<v Speaker 2>layoffs that never actually occur. Companies were arbitrarily let me

0:19:32.040 --> 0:19:38.320
<v Speaker 2>see arbitraging or arbitraging in other words, misleading the numbers.

0:19:38.320 --> 0:19:42.679
<v Speaker 2>There the positive stock market reaction to the news of

0:19:42.760 --> 0:19:46.919
<v Speaker 2>a potential layoff, but a few decades ago the market

0:19:47.040 --> 0:19:51.080
<v Speaker 2>stopped going up because of investors starting to realize that

0:19:51.200 --> 0:19:54.560
<v Speaker 2>companies were not actually even doing the layoffs that they

0:19:54.600 --> 0:19:56.800
<v Speaker 2>were trying to do. So what they're trying to do

0:19:56.880 --> 0:19:59.960
<v Speaker 2>is arbitrage these things. They're trying to play both ends. Again,

0:20:00.040 --> 0:20:02.480
<v Speaker 2>it's the middle to hope that prop up the stock

0:20:02.960 --> 0:20:06.960
<v Speaker 2>and some investors or some people kind of lay off

0:20:07.000 --> 0:20:08.720
<v Speaker 2>on that and don't pay attention to it.

0:20:08.880 --> 0:20:11.840
<v Speaker 3>But still you see stories.

0:20:11.600 --> 0:20:15.359
<v Speaker 2>Like from Challenger Gray and Christmas that's saying that these

0:20:16.320 --> 0:20:20.720
<v Speaker 2>layoffs have been announced, but they haven't come to fruition,

0:20:21.119 --> 0:20:24.000
<v Speaker 2>and so this is one of the things that's kind

0:20:24.000 --> 0:20:27.080
<v Speaker 2>of mutting the waters here data behind the hype. Oxford

0:20:27.160 --> 0:20:30.960
<v Speaker 2>Reports highlighted data from Challenger Gray and Christmas, the recruiting

0:20:31.000 --> 0:20:34.360
<v Speaker 2>firm that is one of the leading providers of this

0:20:34.440 --> 0:20:38.480
<v Speaker 2>kind of data layoff data, to illustrate the disparity between

0:20:38.520 --> 0:20:42.520
<v Speaker 2>the perception and reality. While AI was cited for the

0:20:42.560 --> 0:20:45.760
<v Speaker 2>reason for nearly fifty five thousand job cuts in the

0:20:45.800 --> 0:20:49.320
<v Speaker 2>first eleven months of twenty twenty five, accounting for over

0:20:49.680 --> 0:20:54.240
<v Speaker 2>seventy five percent of all AI related cuts reported since

0:20:54.280 --> 0:20:58.639
<v Speaker 2>twenty twenty three, this figure represents a mere four point

0:20:58.840 --> 0:21:03.879
<v Speaker 2>five percent of total reported job losses, so again over

0:21:04.040 --> 0:21:09.639
<v Speaker 2>inflating the number of announcements of job cuts only to

0:21:09.680 --> 0:21:13.000
<v Speaker 2>make sure that people think you're doing well, when in

0:21:13.080 --> 0:21:16.840
<v Speaker 2>fact you're doing nothing very interesting. I'm Kevin Gordon, America's

0:21:16.840 --> 0:21:22.520
<v Speaker 2>truck in Network seven hundred WLW.

0:21:22.560 --> 0:21:24.960
<v Speaker 6>Here's your trucking forecast for the Try State and the

0:21:24.960 --> 0:21:27.359
<v Speaker 6>rest of the country and the Try State. Overnight mostly

0:21:27.359 --> 0:21:29.159
<v Speaker 6>claudi with rain near day break, the low down to

0:21:29.200 --> 0:21:32.240
<v Speaker 6>fifty seven morning rain for Friday, a high of sixty six.

0:21:32.640 --> 0:21:35.800
<v Speaker 6>Rain Saturday, coming to an end by early afternoon. Otherwise Claudia,

0:21:35.880 --> 0:21:38.960
<v Speaker 6>high of fifty three, mostly Claudia and colder Sunday a

0:21:39.119 --> 0:21:42.720
<v Speaker 6>high of thirty two. Nationally, parts of Michigan's Upper Peninsula

0:21:42.800 --> 0:21:45.480
<v Speaker 6>and the Central High Plain seeing heavy snow while freezing

0:21:45.560 --> 0:21:48.000
<v Speaker 6>rain is possible from the Upper Midwest now into Friday

0:21:48.160 --> 0:21:51.440
<v Speaker 6>and into the Northeast by Friday evening into Saturday. There

0:21:51.480 --> 0:21:54.399
<v Speaker 6>is a slight risk of excessive rainfall from parts of

0:21:54.480 --> 0:21:58.119
<v Speaker 6>the Tennessee Valley to the Lower Mississippi Valley Friday into

0:21:58.240 --> 0:21:59.080
<v Speaker 6>Saturday morning.

0:22:02.840 --> 0:22:07.200
<v Speaker 2>Seven hundred IM Kevin Gordon is as America's struck a network.

0:22:07.720 --> 0:22:09.920
<v Speaker 2>You know, I've had, you know, more of a chance

0:22:09.960 --> 0:22:12.359
<v Speaker 2>to you ponder that, you know, before you know, I

0:22:12.359 --> 0:22:14.520
<v Speaker 2>was putting the show prep together, I was reading that

0:22:14.560 --> 0:22:19.439
<v Speaker 2>stuff about inflating the job layoff announcements versus what has

0:22:19.480 --> 0:22:23.160
<v Speaker 2>actually happened. Just the amount of how do you say,

0:22:23.320 --> 0:22:27.199
<v Speaker 2>just trying to dupe the investors, trying to It blows

0:22:27.280 --> 0:22:31.159
<v Speaker 2>my mind that all these things that people pick up

0:22:31.200 --> 0:22:33.920
<v Speaker 2>on and that affect the markets. When you dig into

0:22:34.000 --> 0:22:36.760
<v Speaker 2>the numbers and find out that hey are not as

0:22:36.800 --> 0:22:39.160
<v Speaker 2>bad as you. And again, if they're putting out these

0:22:39.160 --> 0:22:42.639
<v Speaker 2>announcements and saying that they're going to be doing certain layoffs,

0:22:42.800 --> 0:22:46.000
<v Speaker 2>then people having their perception that, oh my gosh, there's

0:22:46.000 --> 0:22:48.600
<v Speaker 2>going to be a ton of layoffs, the unemployment rate

0:22:48.720 --> 0:22:51.000
<v Speaker 2>is going to go up, there's going to be you know,

0:22:51.160 --> 0:22:54.199
<v Speaker 2>job market, the job market is softening, and there's going

0:22:54.280 --> 0:22:57.840
<v Speaker 2>to be possibly with people getting layoff like that. The

0:22:57.960 --> 0:23:02.919
<v Speaker 2>economic downturn when in fact it is merely phantom layoffs,

0:23:03.040 --> 0:23:06.159
<v Speaker 2>which is just blows my mind. But again, if you

0:23:06.200 --> 0:23:07.840
<v Speaker 2>miss any part of that, or miss any of our

0:23:07.880 --> 0:23:10.680
<v Speaker 2>previous shows, hit up that iHeartRadio app and of course

0:23:10.680 --> 0:23:12.800
<v Speaker 2>that's brought to you by our friends at Rush Truck Centers.

0:23:13.040 --> 0:23:16.719
<v Speaker 2>Another story that surprised me, and this is from the

0:23:16.720 --> 0:23:20.720
<v Speaker 2>Federal Reserve. Okay, the San Francisco Federal Reserve, right again,

0:23:21.200 --> 0:23:25.000
<v Speaker 2>Federal Reserve twenty three thousand plus employees that work for them.

0:23:25.480 --> 0:23:27.960
<v Speaker 2>They have twenty you know, a lot of them I

0:23:28.040 --> 0:23:31.320
<v Speaker 2>assume are economists if you figure that they're in the

0:23:31.359 --> 0:23:35.640
<v Speaker 2>financial business and financial industry, and they determine as far

0:23:35.680 --> 0:23:38.840
<v Speaker 2>as you know, the job market, inflation and all that,

0:23:38.920 --> 0:23:42.080
<v Speaker 2>determining whether or not they should raise or lower interest rates.

0:23:42.160 --> 0:23:45.400
<v Speaker 2>So you would assume that there'd be some economists in there.

0:23:45.520 --> 0:23:49.680
<v Speaker 2>I get this research note from the Federal Reserve San

0:23:49.680 --> 0:23:55.080
<v Speaker 2>Francisco observed that previous episodes of high tariff rates resulted

0:23:55.119 --> 0:24:01.080
<v Speaker 2>in lower inflation and mapped out two possible explanations for

0:24:01.240 --> 0:24:02.080
<v Speaker 2>the phenomenon.

0:24:02.359 --> 0:24:03.159
<v Speaker 3>What have I been.

0:24:03.040 --> 0:24:06.840
<v Speaker 2>Saying since Liberation Day back on April the second? Digging

0:24:06.920 --> 0:24:10.359
<v Speaker 2>back into my economics class when I was in college,

0:24:10.520 --> 0:24:13.879
<v Speaker 2>listening to people like Larry Kudlow, listening to people like

0:24:13.960 --> 0:24:17.200
<v Speaker 2>our friend Phil Flynn with Price Futures Group, listening to

0:24:17.359 --> 0:24:22.040
<v Speaker 2>people Kevin O'Leary from Shark Tank talking about that it's

0:24:22.119 --> 0:24:26.600
<v Speaker 2>not tariffs that add to inflation. It's overspending. It's out

0:24:26.600 --> 0:24:30.439
<v Speaker 2>of control spending by the federal government, which we saw

0:24:30.720 --> 0:24:33.920
<v Speaker 2>in the later stages of the Biden administration. Well, actually

0:24:34.080 --> 0:24:36.640
<v Speaker 2>in the beginning of the Biden administration when they did

0:24:36.640 --> 0:24:41.560
<v Speaker 2>the Inflation Reduction Act, which had nothing to do with

0:24:41.600 --> 0:24:45.399
<v Speaker 2>inflation reduction but had more to do with green energy

0:24:46.160 --> 0:24:50.919
<v Speaker 2>programs to be as a windfall to donors of the

0:24:50.960 --> 0:24:54.639
<v Speaker 2>Democratic Party, and then any of these stimulus bills or

0:24:54.760 --> 0:24:57.880
<v Speaker 2>of stimulus checks that went out, even though they were

0:24:57.920 --> 0:25:00.680
<v Speaker 2>warned that that would lead to inflation, they went ahead

0:25:00.680 --> 0:25:04.760
<v Speaker 2>and did it anyway. So government spending, out of control

0:25:04.840 --> 0:25:09.280
<v Speaker 2>government spending leads to inflation, not necessarily tariffs. And here

0:25:09.320 --> 0:25:13.639
<v Speaker 2>we have the San Francisco Federal Reserve Research Group says

0:25:13.920 --> 0:25:17.000
<v Speaker 2>the same thing. The fifteen percent increase in the average

0:25:17.080 --> 0:25:20.600
<v Speaker 2>US tariff rate in twenty twenty five was the largest

0:25:20.720 --> 0:25:24.720
<v Speaker 2>in the modern era. It pointed out the researchers looked

0:25:24.800 --> 0:25:28.160
<v Speaker 2>back to before World War Two to see the potential

0:25:28.200 --> 0:25:32.080
<v Speaker 2>effects from high tariff rates. Let me see see what

0:25:32.119 --> 0:25:36.040
<v Speaker 2>the potential effects from high tariff rates might have on

0:25:36.080 --> 0:25:40.360
<v Speaker 2>the economy. Since World War II, global tariffs dropped from

0:25:40.400 --> 0:25:43.920
<v Speaker 2>ten percent in nineteen forty five to under three percent

0:25:44.240 --> 0:25:47.320
<v Speaker 2>by January of twenty twenty five due to the General

0:25:47.320 --> 0:25:52.720
<v Speaker 2>Agreement on Tariffs and Trade an acronym of GATT or GAT.

0:25:52.920 --> 0:25:56.160
<v Speaker 2>The last time average tariffs were above fifteen percent occurred

0:25:56.200 --> 0:26:01.000
<v Speaker 2>between World War One and World War Two. Prominent theory

0:26:01.119 --> 0:26:06.280
<v Speaker 2>says tariff shocks tend to increase domestic production costs because

0:26:06.320 --> 0:26:09.320
<v Speaker 2>the import value it arises.

0:26:09.359 --> 0:26:11.560
<v Speaker 3>So if you have higher costs.

0:26:11.200 --> 0:26:14.080
<v Speaker 2>Coming in, of course you're going to have higher costs

0:26:14.160 --> 0:26:17.560
<v Speaker 2>going out. That's one theory we've talked about that our

0:26:17.680 --> 0:26:21.600
<v Speaker 2>estimate suggests the opposite, however, with the shocks from higher

0:26:21.680 --> 0:26:26.159
<v Speaker 2>terriffs leading to both higher unemployment and lower inflation. Of

0:26:26.600 --> 0:26:30.359
<v Speaker 2>this note said, however, what they're talking about that in

0:26:30.400 --> 0:26:35.520
<v Speaker 2>the past that high inflation or partial inflation or low

0:26:36.040 --> 0:26:40.960
<v Speaker 2>layoffs hasn't occurred. One possible explanation is that terraff shock

0:26:41.080 --> 0:26:46.040
<v Speaker 2>generally coincides with the increased economic uncertainty, which by itself

0:26:46.119 --> 0:26:52.040
<v Speaker 2>depresses economic added activity and puts downward pressure on inflation.

0:26:52.760 --> 0:26:58.280
<v Speaker 2>Another possible explanation. So they're writing this research paper and

0:26:58.359 --> 0:27:02.679
<v Speaker 2>they're arguing with them, and yet they got the big headline.

0:27:02.800 --> 0:27:05.800
<v Speaker 2>The bottom line is that their research is suggesting that

0:27:05.920 --> 0:27:11.160
<v Speaker 2>higher tariffs could reduce inflation. Actually, then they get into

0:27:11.200 --> 0:27:15.600
<v Speaker 2>that apparently their original theories in terms of this is

0:27:15.640 --> 0:27:20.359
<v Speaker 2>going to lead to inflation, lead to high unemployment, and

0:27:20.480 --> 0:27:26.280
<v Speaker 2>lead to a possible recession because numbers today don't necessarily

0:27:26.359 --> 0:27:28.840
<v Speaker 2>match these situation from one.

0:27:28.680 --> 0:27:29.760
<v Speaker 3>Hundred years ago.

0:27:30.560 --> 0:27:35.520
<v Speaker 2>So again, these are economists, These people you would think

0:27:35.800 --> 0:27:40.800
<v Speaker 2>would have a basic understanding of the history of economics,

0:27:41.320 --> 0:27:44.879
<v Speaker 2>the push and pull from different sectors of the economy,

0:27:45.200 --> 0:27:50.199
<v Speaker 2>whether tariffs increase, tariffs decrease, inflation up, inflation down, or

0:27:50.240 --> 0:27:54.400
<v Speaker 2>what are the actual pressures on the economy. And yet

0:27:54.640 --> 0:27:57.520
<v Speaker 2>the people that are on the federal that in the

0:27:57.520 --> 0:28:02.199
<v Speaker 2>Federal Reserve, that they cannot get their handle on it.

0:28:02.520 --> 0:28:04.639
<v Speaker 2>But they're going to be the stewards and they're going

0:28:04.720 --> 0:28:07.400
<v Speaker 2>to know what it is all about as far as

0:28:07.560 --> 0:28:10.919
<v Speaker 2>when to raise interest rates. That's why he keep hearing

0:28:10.960 --> 0:28:14.200
<v Speaker 2>that Lion Jerry pebble will, at least for me, lion

0:28:14.280 --> 0:28:17.960
<v Speaker 2>Jerry Powell changes what he's saying in terms of what

0:28:18.160 --> 0:28:21.080
<v Speaker 2>is going to why, what is going to affect interest

0:28:21.160 --> 0:28:24.399
<v Speaker 2>rates either increases or decreases, And it's going to be

0:28:24.480 --> 0:28:28.080
<v Speaker 2>basically on what his whim is. And if the fact

0:28:28.160 --> 0:28:30.760
<v Speaker 2>that you look back at the history of the Federal Reserve,

0:28:31.000 --> 0:28:34.280
<v Speaker 2>they have always been late to the game and either

0:28:34.440 --> 0:28:38.480
<v Speaker 2>interest rates cuts or interest rate increases, that the damage

0:28:38.480 --> 0:28:40.920
<v Speaker 2>has already done and all they do is play catch

0:28:41.000 --> 0:28:45.560
<v Speaker 2>up and the situation continues. And basically this story, with

0:28:45.680 --> 0:28:48.960
<v Speaker 2>them talking about and arguing about both sides of the issue,

0:28:49.080 --> 0:28:51.680
<v Speaker 2>they don't even really come to a conclusion except for

0:28:51.720 --> 0:28:57.800
<v Speaker 2>the fact that research suggests that higher tears could reduce inflation. Unbelievable,

0:28:58.320 --> 0:29:02.080
<v Speaker 2>even though all these so called experts back in April

0:29:02.240 --> 0:29:04.800
<v Speaker 2>we're saying that, oh, this is going to lead to inflation,

0:29:04.920 --> 0:29:08.320
<v Speaker 2>going to lead to unemployment, high unemployment, and going to

0:29:09.080 --> 0:29:12.360
<v Speaker 2>result in the possibility of a recession. And yet as

0:29:12.360 --> 0:29:14.959
<v Speaker 2>we've seen and as we've talked about on this program,

0:29:15.080 --> 0:29:16.080
<v Speaker 2>it hasn't happened.

0:29:16.200 --> 0:29:17.800
<v Speaker 3>So isn't that amazing?

0:29:18.240 --> 0:29:21.040
<v Speaker 2>I go back to this saying, and I keep bringing

0:29:21.040 --> 0:29:23.880
<v Speaker 2>it up because the more and more you read it,

0:29:23.920 --> 0:29:25.760
<v Speaker 2>and the more and more you hear it, the more

0:29:25.760 --> 0:29:29.320
<v Speaker 2>it's true. An economist is an expert who will know

0:29:29.520 --> 0:29:34.400
<v Speaker 2>tomorrow why the things he predicted yesterday didn't happen today.

0:29:34.640 --> 0:29:38.640
<v Speaker 2>So everything they do is always in the hindsight. They'll

0:29:38.680 --> 0:29:42.240
<v Speaker 2>explain why stuff that they predicted didn't happen. They won't

0:29:42.320 --> 0:29:45.480
<v Speaker 2>say that their predictions were wrong. They'll just explain to

0:29:45.880 --> 0:29:49.680
<v Speaker 2>why other things happened that changed what they had predicted.

0:29:49.840 --> 0:29:53.800
<v Speaker 2>It is just absolutely amazing and to a certain extent,

0:29:54.000 --> 0:29:57.000
<v Speaker 2>mind boggling. One of the things that is very interesting,

0:29:57.040 --> 0:30:00.120
<v Speaker 2>and again bringing these things up, bringing up the the

0:30:00.160 --> 0:30:04.680
<v Speaker 2>fact about unemployment, initial jobless claims, whether or not tariffs

0:30:04.720 --> 0:30:08.160
<v Speaker 2>are going to increase inflation, which then if it increases inflation,

0:30:08.240 --> 0:30:09.920
<v Speaker 2>people are not going to be able to afford to

0:30:09.920 --> 0:30:13.640
<v Speaker 2>buy certain things, which then leaves things on the shelves

0:30:14.440 --> 0:30:17.120
<v Speaker 2>more people are not buying things, which means that it's

0:30:17.160 --> 0:30:20.400
<v Speaker 2>going to adversely affect the trucking industry. But what we're

0:30:20.440 --> 0:30:24.120
<v Speaker 2>seeing is that the opposite of that, that the employment

0:30:24.200 --> 0:30:28.400
<v Speaker 2>numbers that we are getting don't pay attention to the announcements,

0:30:29.000 --> 0:30:32.520
<v Speaker 2>pay attention to what the initial jobless claims are and

0:30:32.560 --> 0:30:34.840
<v Speaker 2>what they are. And in one of the stories they

0:30:34.840 --> 0:30:37.120
<v Speaker 2>were talking about I don't believe I mentioned it, but

0:30:37.240 --> 0:30:39.760
<v Speaker 2>the fact is that they were saying that now that

0:30:39.840 --> 0:30:43.160
<v Speaker 2>they have a better handle on what's going on after

0:30:43.200 --> 0:30:47.080
<v Speaker 2>the holidays and after the Schumer shut down, that it

0:30:47.120 --> 0:30:51.360
<v Speaker 2>appears as though that the unemployment rate that they had

0:30:51.480 --> 0:30:54.880
<v Speaker 2>said was up to four point six percent may actually

0:30:54.920 --> 0:30:58.720
<v Speaker 2>be revised down. And who has been saying that since

0:30:58.720 --> 0:31:02.480
<v Speaker 2>that number was announce right here on America's truck In

0:31:02.600 --> 0:31:06.280
<v Speaker 2>Network once again, listen to this program. You're gonna be

0:31:06.320 --> 0:31:09.120
<v Speaker 2>far ahead of the curve so far they won't even

0:31:09.120 --> 0:31:12.200
<v Speaker 2>see your tail lights. One of the other things going

0:31:12.240 --> 0:31:16.600
<v Speaker 2>on is productivity levels, how much people are producing on

0:31:16.720 --> 0:31:19.120
<v Speaker 2>the job, whether that number is up or down.

0:31:19.520 --> 0:31:21.000
<v Speaker 3>We'll be talking about that coming up.

0:31:21.160 --> 0:31:26.840
<v Speaker 2>I'm Kevin Gordon, America's struck a Network seven hundred WLW.

0:31:27.320 --> 0:31:33.440
<v Speaker 7>News Radio seven hundred WLW and iHeartRadio Station Guaranteed Human

0:31:33.880 --> 0:31:38.920
<v Speaker 7>seven hundred WLW, HI Hard Radio Live.

0:31:39.920 --> 0:31:44.080
<v Speaker 2>This is America's struck In Network, seven hundred WLW.

0:31:44.120 --> 0:31:45.160
<v Speaker 3>I'm Kevin Gordon.

0:31:45.640 --> 0:31:51.240
<v Speaker 2>Labor productivity again, this is good news, can be good news,

0:31:51.320 --> 0:31:54.400
<v Speaker 2>can be bad news because Again, if people on the

0:31:54.520 --> 0:31:58.640
<v Speaker 2>job are producing more and their productivity is up, then

0:31:58.680 --> 0:32:01.600
<v Speaker 2>that means more goods are on on the market. And

0:32:01.800 --> 0:32:06.560
<v Speaker 2>because people are more productive, then the employment costs stretched

0:32:06.560 --> 0:32:10.440
<v Speaker 2>out over the number of units that are actually manufactured.

0:32:10.680 --> 0:32:12.840
<v Speaker 2>You know, if in an hour period of time, whatever

0:32:12.880 --> 0:32:17.120
<v Speaker 2>your hourly rate is, if you're producing ten percent more

0:32:17.560 --> 0:32:21.320
<v Speaker 2>than what you were earlier for whatever reason, maybe job flow,

0:32:21.400 --> 0:32:24.800
<v Speaker 2>maybe the way things of the supply chain, or something

0:32:24.840 --> 0:32:28.240
<v Speaker 2>along those lines. If productivity is up, the cost per

0:32:28.360 --> 0:32:32.880
<v Speaker 2>unit goes down. That would then lower the prices, lower inflation,

0:32:33.360 --> 0:32:36.360
<v Speaker 2>and then we would have things better on an even keel,

0:32:36.560 --> 0:32:39.560
<v Speaker 2>and we'd actually see prices coming down. So this is

0:32:39.600 --> 0:32:43.200
<v Speaker 2>an important number from that aspect. Again, you have certain

0:32:43.720 --> 0:32:47.960
<v Speaker 2>topics again when I go into and I search these things,

0:32:48.000 --> 0:32:52.480
<v Speaker 2>because on a weekly basis, the economic calendar comes out.

0:32:52.600 --> 0:32:55.560
<v Speaker 2>You know what reports are going to be done on

0:32:55.600 --> 0:32:58.400
<v Speaker 2>what particular day, and then on that day you can

0:32:58.480 --> 0:33:01.560
<v Speaker 2>go and search it. But you don't want to go

0:33:01.640 --> 0:33:03.720
<v Speaker 2>to just one resource. You want to go to several

0:33:03.760 --> 0:33:08.080
<v Speaker 2>resources so you get an accurate picture of what's going on.

0:33:08.520 --> 0:33:12.920
<v Speaker 2>And of course sometimes some reports will actually contradict within

0:33:13.040 --> 0:33:16.680
<v Speaker 2>the story itself what they're saying, and so by reading

0:33:16.720 --> 0:33:20.400
<v Speaker 2>a lot more articles about the same issue, you come

0:33:20.440 --> 0:33:24.600
<v Speaker 2>to a well. In our case, here aut America's truck

0:33:24.640 --> 0:33:28.680
<v Speaker 2>in network the right conclusion because again we have been

0:33:28.760 --> 0:33:32.000
<v Speaker 2>right more than we have been wrong on this program.

0:33:32.080 --> 0:33:36.080
<v Speaker 2>Look at some of the headlines Barons on their headline,

0:33:36.280 --> 0:33:41.320
<v Speaker 2>US productivity surges, but AI isn't driving efficiency gains yet,

0:33:41.440 --> 0:33:43.680
<v Speaker 2>which is kind of ties into what we were seeing

0:33:43.720 --> 0:33:47.240
<v Speaker 2>earlier that some of these AI gains or some of

0:33:47.280 --> 0:33:52.239
<v Speaker 2>these AI layoffs aren't necessarily factored in there properly. That

0:33:52.320 --> 0:33:55.760
<v Speaker 2>it has to do more with over hiring US product

0:33:56.080 --> 0:33:59.680
<v Speaker 2>This is from Bloomberg dot Com. US productivity picked up

0:33:59.720 --> 0:34:04.000
<v Speaker 2>in the third quarter. Labor costs declined again. If the

0:34:04.200 --> 0:34:08.680
<v Speaker 2>labor costs again, if you're producing more items per hour,

0:34:09.560 --> 0:34:13.560
<v Speaker 2>then the cost of your labor to that is stretched

0:34:13.560 --> 0:34:16.200
<v Speaker 2>over a lot more products, which would be then the

0:34:16.280 --> 0:34:17.560
<v Speaker 2>labor costs would be down.

0:34:18.120 --> 0:34:18.720
<v Speaker 3>Third quarter.

0:34:18.840 --> 0:34:22.400
<v Speaker 2>According to Reuter's third quarter productivity rises at.

0:34:22.360 --> 0:34:25.600
<v Speaker 3>Fastest pace in two years.

0:34:26.520 --> 0:34:28.960
<v Speaker 2>Taking a look at that particular story at US economy,

0:34:29.480 --> 0:34:33.960
<v Speaker 2>secret weapon surges in a third quarter, raising hopes of

0:34:34.280 --> 0:34:40.400
<v Speaker 2>AI payoff again. A lot of talk about AI and AI,

0:34:40.920 --> 0:34:45.560
<v Speaker 2>depending upon how it's used in the workforce can make

0:34:45.640 --> 0:34:49.359
<v Speaker 2>you more productive, make things a lot easier for you

0:34:49.440 --> 0:34:54.600
<v Speaker 2>to handle, and may do some of the research not

0:34:54.760 --> 0:34:58.719
<v Speaker 2>necessarily lead to layoffs, but actually make the employees that

0:34:58.760 --> 0:35:02.960
<v Speaker 2>are there little bit more efficient, which is always good.

0:35:03.560 --> 0:35:06.160
<v Speaker 2>One of the biggest drivers of the strong US economy,

0:35:06.280 --> 0:35:10.400
<v Speaker 2>worker productivity surged over the summer and in early fall,

0:35:11.360 --> 0:35:15.400
<v Speaker 2>raising hopes that investment in artificial intelligence is beginning to

0:35:15.440 --> 0:35:16.000
<v Speaker 2>pay off.

0:35:16.560 --> 0:35:18.799
<v Speaker 3>US productivity accelerated at a.

0:35:18.840 --> 0:35:22.640
<v Speaker 2>Four point nine percent annual clip in the third quarter.

0:35:22.920 --> 0:35:25.880
<v Speaker 2>The government said on Thursday. The game was in liign

0:35:25.960 --> 0:35:29.640
<v Speaker 2>with what forecasts of economists surveyed by the Wall Street Journal.

0:35:30.040 --> 0:35:34.759
<v Speaker 2>Productivity has been steadily improving, and some economists expect the

0:35:34.800 --> 0:35:38.280
<v Speaker 2>trend to continue. You know, quite honestly, this could also

0:35:38.360 --> 0:35:42.880
<v Speaker 2>be the fact that since the pandemic, people are back

0:35:43.040 --> 0:35:46.000
<v Speaker 2>to work, they had not been on the job, or

0:35:46.080 --> 0:35:49.120
<v Speaker 2>they had switched jobs as a result of maybe the

0:35:49.200 --> 0:35:53.359
<v Speaker 2>possibility of higher pay someplace else. And you know, in

0:35:53.400 --> 0:35:56.600
<v Speaker 2>some instances, you look at certain jobs and they talk

0:35:56.680 --> 0:36:01.120
<v Speaker 2>about how it takes somewhere between six months to a

0:36:01.200 --> 0:36:05.160
<v Speaker 2>year or more to get very efficient and knowledgeable of

0:36:05.200 --> 0:36:08.760
<v Speaker 2>that particular position to the point where you are being

0:36:08.960 --> 0:36:13.080
<v Speaker 2>very productive. This may not have anything to do with AI,

0:36:13.400 --> 0:36:16.200
<v Speaker 2>but more the fact that somebody is used to doing

0:36:16.239 --> 0:36:17.320
<v Speaker 2>this particular job.

0:36:17.600 --> 0:36:19.200
<v Speaker 3>They know some of the shortcuts.

0:36:19.320 --> 0:36:22.120
<v Speaker 2>Because if you've ever done any cooking, if you've ever

0:36:22.160 --> 0:36:25.479
<v Speaker 2>done any baking, if you start off and you've never

0:36:25.560 --> 0:36:28.480
<v Speaker 2>done the recipe before, you are going to be going

0:36:28.920 --> 0:36:31.759
<v Speaker 2>line by line because you know, if you look at

0:36:31.760 --> 0:36:34.880
<v Speaker 2>the recipe, it'll say, oh, the preparation time is ten minutes,

0:36:35.200 --> 0:36:37.840
<v Speaker 2>and the baking time or the cooking time is exercise,

0:36:38.080 --> 0:36:40.799
<v Speaker 2>and it gives you all these statistics. But if you've

0:36:40.840 --> 0:36:45.720
<v Speaker 2>never prepared it before, that preparation time may be double

0:36:45.920 --> 0:36:48.400
<v Speaker 2>or triple because you're making sure that you want to

0:36:48.440 --> 0:36:51.319
<v Speaker 2>do it accurately. So you're going to the cookbook, you're

0:36:51.320 --> 0:36:54.600
<v Speaker 2>going to the recipe, you're reading the ingredients, you're measuring

0:36:54.640 --> 0:36:57.440
<v Speaker 2>those out, you're reading and you're saying, Okay, I got

0:36:57.480 --> 0:36:59.760
<v Speaker 2>to do this step, then I got to do this step,

0:37:00.040 --> 0:37:02.840
<v Speaker 2>that I have to do this step and this step. Well,

0:37:03.040 --> 0:37:05.480
<v Speaker 2>after you've done that a few times, then you know

0:37:05.560 --> 0:37:07.200
<v Speaker 2>what to do, and you could you don't have to

0:37:07.280 --> 0:37:10.400
<v Speaker 2>keep referring back to the recipe, and it just becomes

0:37:10.560 --> 0:37:13.160
<v Speaker 2>memory skills. Of where you know what to put in,

0:37:13.320 --> 0:37:15.160
<v Speaker 2>you know what to do, and you know how to

0:37:15.200 --> 0:37:18.000
<v Speaker 2>do it. So on the job market or in the

0:37:18.080 --> 0:37:21.520
<v Speaker 2>job in the working if you in fact know what

0:37:21.560 --> 0:37:25.319
<v Speaker 2>you're doing and you have had the experience doing this,

0:37:25.760 --> 0:37:28.879
<v Speaker 2>then you become more productive at your job. And that

0:37:28.920 --> 0:37:32.239
<v Speaker 2>could account for a lot of what this productivity increases.

0:37:32.520 --> 0:37:36.040
<v Speaker 2>Because we are now and to a certain extent, some

0:37:36.120 --> 0:37:39.319
<v Speaker 2>of these companies have actually told their employees you're no

0:37:39.360 --> 0:37:40.399
<v Speaker 2>longer working from home.

0:37:40.440 --> 0:37:42.160
<v Speaker 3>We want you back in the office.

0:37:42.239 --> 0:37:44.480
<v Speaker 2>And maybe because they're back in the office, or a

0:37:44.480 --> 0:37:47.480
<v Speaker 2>lot of companies are back in the office, the productivity

0:37:47.600 --> 0:37:50.840
<v Speaker 2>is up. People aren't home, they aren't messing around on

0:37:50.880 --> 0:37:54.160
<v Speaker 2>the computer, but you know, doing whatever they're doing, and

0:37:54.200 --> 0:37:57.400
<v Speaker 2>they're actually on the job being more productive. That isn't

0:37:57.480 --> 0:38:00.800
<v Speaker 2>covered in here, but that's the theory I'm putting out there.

0:38:01.200 --> 0:38:05.120
<v Speaker 2>Productivity has steadily be increasing, improving, and some economists expect

0:38:05.200 --> 0:38:08.720
<v Speaker 2>the trend to continue. Unit labor costs fell one point

0:38:08.800 --> 0:38:11.800
<v Speaker 2>nine percent in the third quarter to assign that labor

0:38:11.840 --> 0:38:16.080
<v Speaker 2>costs are now driving inflationary pressures so or not driving

0:38:16.080 --> 0:38:19.800
<v Speaker 2>inflationary pressures. So again, as the unit costs come down,

0:38:19.960 --> 0:38:22.880
<v Speaker 2>the cost of that item comes down and it can

0:38:22.960 --> 0:38:25.279
<v Speaker 2>be sold for a lot cheaper on a year over

0:38:25.360 --> 0:38:28.560
<v Speaker 2>year basis. Productivity accelerated to one point nine percent gain

0:38:28.640 --> 0:38:31.880
<v Speaker 2>from one point five percent in the third quarter or

0:38:31.920 --> 0:38:34.680
<v Speaker 2>in the prior quarter. In the third quarter, output rose

0:38:34.960 --> 0:38:38.520
<v Speaker 2>five point four percent annual clip, while the hours work

0:38:38.719 --> 0:38:43.520
<v Speaker 2>rose point five percent. Hourly compensation adjusted for inflation fell

0:38:43.719 --> 0:38:48.880
<v Speaker 2>two tenths of one percent in the third quarter. Matthew Martin,

0:38:49.080 --> 0:38:53.120
<v Speaker 2>senior economists at Oxford Economics. Now Oxford Economics is the

0:38:53.160 --> 0:38:57.319
<v Speaker 2>group that talked about the AI story and that some

0:38:57.480 --> 0:39:03.360
<v Speaker 2>of the job layoffs are phantom layoffs and not actual layoffs,

0:39:03.560 --> 0:39:06.800
<v Speaker 2>so again kind of tying the various stories together together.

0:39:07.320 --> 0:39:08.399
<v Speaker 3>Productivity will be.

0:39:08.360 --> 0:39:13.120
<v Speaker 2>A key to determining the economy's speed limit and inflationary dynamics.

0:39:13.280 --> 0:39:18.400
<v Speaker 2>If productivity growth continues to accelerate due to tax cuts, deregulation,

0:39:18.520 --> 0:39:23.600
<v Speaker 2>and technological advancements, including AI, economic growth can pick up

0:39:23.880 --> 0:39:29.480
<v Speaker 2>without causing unwanted inflation. According to the Richmond Fed, President

0:39:29.560 --> 0:39:33.520
<v Speaker 2>Tom Barkin said in a speech on Monday, reluctant to

0:39:33.680 --> 0:39:37.680
<v Speaker 2>pass along higher prices from President Donald Trump's tariffs to

0:39:37.800 --> 0:39:42.400
<v Speaker 2>their customers, businesses have used automation and reduced hiring to

0:39:42.520 --> 0:39:47.360
<v Speaker 2>offset cost increases. Well, the other side of that is

0:39:47.360 --> 0:39:50.400
<v Speaker 2>is that they may have cut into their profit margins

0:39:50.440 --> 0:39:53.800
<v Speaker 2>a little bit. The profit margins again, as I talked about,

0:39:53.840 --> 0:39:57.040
<v Speaker 2>as far as tariffs are concerned, you have many layers

0:39:57.040 --> 0:40:01.200
<v Speaker 2>of tariffs. You have something being manufactured in a foreign country,

0:40:01.560 --> 0:40:04.920
<v Speaker 2>cheaper labor than over here, they have high margins. Before

0:40:04.920 --> 0:40:08.719
<v Speaker 2>they sell it to the exporter, they maybe absorbed some

0:40:08.840 --> 0:40:13.239
<v Speaker 2>of those tariffs. The exporter themselves may absorb some of

0:40:13.239 --> 0:40:18.560
<v Speaker 2>those tariffs. The importer may absorb some of those tariffs. Again,

0:40:18.719 --> 0:40:24.080
<v Speaker 2>because you're concerned about you're concerned about customer loyalty and

0:40:24.640 --> 0:40:25.840
<v Speaker 2>your customer base.

0:40:26.120 --> 0:40:28.680
<v Speaker 3>You don't want to lose that, so you.

0:40:28.640 --> 0:40:32.440
<v Speaker 2>Absorb that a little bit at the importer level. Then

0:40:32.480 --> 0:40:35.239
<v Speaker 2>it goes to the wholesaler, and then to the retailer

0:40:35.480 --> 0:40:40.000
<v Speaker 2>and then to the customer. So because of trying to

0:40:40.040 --> 0:40:43.680
<v Speaker 2>maintain market share, these companies are absorbing this.

0:40:43.760 --> 0:40:44.439
<v Speaker 3>Along the way.

0:40:44.760 --> 0:40:48.080
<v Speaker 2>So again, this may not be just all according to

0:40:48.120 --> 0:40:53.000
<v Speaker 2>the FED, that that people are automation is reducing these costs,

0:40:53.040 --> 0:40:55.839
<v Speaker 2>because there's really no sign of that. Well, folks, we're

0:40:55.880 --> 0:40:57.760
<v Speaker 2>up against the clock here. Time for us to scoot

0:40:57.800 --> 0:41:00.400
<v Speaker 2>out the door. I hope you have a great weekend.

0:41:00.440 --> 0:41:02.640
<v Speaker 2>Stay tuned for red Eye Radio at the top of

0:41:02.680 --> 0:41:06.520
<v Speaker 2>the hour. I'm Kevin Gordon, America's truck in Network seven

0:41:06.640 --> 0:41:08.640
<v Speaker 2>hundred WLW