WEBVTT - Dana Peterson Talks Markets in 2026

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Here's the latest US

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<v Speaker 1>data blind spots weighing on economic forecasts in the new year.

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<v Speaker 1>Data Peterson of the Conference Board, writing twenty twenty five,

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<v Speaker 1>is ending on a confusing note for markets, economists, and

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<v Speaker 1>central bankers alike. So we should not completely ignore the

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<v Speaker 1>data data joins us now, Happy New York. Thank you

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<v Speaker 1>so much for being with US data. Let's start with

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<v Speaker 1>the data that we have gotten. Why is it so noisy?

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<v Speaker 1>How should people look at it? Considering that people do

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<v Speaker 1>view it as somewhat noisy, but also they can't ignore.

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<v Speaker 2>It exactly, you can't ignore these data. We did have

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<v Speaker 2>data for the third quarter. Certainly, the GDP came in

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<v Speaker 2>a lot stronger than expected, and certainly consumption was a

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<v Speaker 2>lot stronger. Even though we did have data, it shows

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<v Speaker 2>that the Fed, I mean the Federal Reserve. Sorry, it

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<v Speaker 2>shows that the federal government probably had more data in

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<v Speaker 2>between releases and certainly after the shutdown. But I think

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<v Speaker 2>the key thing is that inventories and trade we're very confusing.

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<v Speaker 2>And indeed, when you add up the inventories, well, when

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<v Speaker 2>you add up the imports plus the consumption, the inventory's

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<v Speaker 2>numbers just don't make sense. So we really need to

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<v Speaker 2>get data next week on inventories as well as international trade,

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<v Speaker 2>business sentiment, and also employment. I think we really need

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<v Speaker 2>to see more data to get a handle on what

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<v Speaker 2>happened in the third quarter and also what happened in

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<v Speaker 2>the fourth quarter data.

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<v Speaker 1>We are going to get some data come next week

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<v Speaker 1>that is going to be important, including the non farm

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<v Speaker 1>pails as well as some of the manufacturing aspects that

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<v Speaker 1>you're talking about. Nonetheless, we have a host of other

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<v Speaker 1>information out there that people keep pointing to. Whether it's ADP,

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<v Speaker 1>whether it's earnings, whether it's the ruttoric coming out of

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<v Speaker 1>a lot of companies, or whether it's retail sales. I mean,

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<v Speaker 1>is there some sort of conclusion that you can take

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<v Speaker 1>even amid the noise.

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<v Speaker 2>Well, I think you know, certainly the stock market does

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<v Speaker 2>not really like the real economy, so we can't look

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<v Speaker 2>to that, and also people who most people don't own stocks,

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<v Speaker 2>so they're not really benefiting from that. We do have

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<v Speaker 2>lots of sentiment data. Of course, our consumer sentiment data

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<v Speaker 2>has shown that consumers are less sanguine about the current

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<v Speaker 2>conditions as well as having some concerns about the future,

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<v Speaker 2>you know, retail sales at all we have really is

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<v Speaker 2>the end of the third quarter, and they were weaker.

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<v Speaker 2>So I think that we just need more information, and

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<v Speaker 2>you can't look at these things and try to estimate

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<v Speaker 2>what the government data is going to tell us.

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<v Speaker 3>I'm looking at the Conference Board Consumer Confidence Index and

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<v Speaker 3>it hasn't been this low since the pandemic. So what

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<v Speaker 3>does that tell us about, you know, inflation, growth, spending.

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<v Speaker 2>Well, I think the inflation did has yet to hit us. Remember,

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<v Speaker 2>the tariffs that were implemented were delayed twice, and also

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<v Speaker 2>they were raised and lowered several times, so many businesses

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<v Speaker 2>are still waiting to see if there's any certainty with

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<v Speaker 2>respect to tariffs. Yes, we've had a number of deals established,

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<v Speaker 2>but there's still a lot that's unknown. And so with

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<v Speaker 2>businesses uncertain, it doesn't mean that it just means that

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<v Speaker 2>we're not going to see much hiring. We're not seeing layoffs,

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<v Speaker 2>which is good. Most people still are working, but those

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<v Speaker 2>who do get laid off are finding it very difficult

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<v Speaker 2>to find jobs. And even though most consumers are working

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<v Speaker 2>and they actually are spending, the type of spending that

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<v Speaker 2>they're engaged with is very different they're buying things that

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<v Speaker 2>they need, and when it comes to especially with goods

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<v Speaker 2>and services, and when it does come to things that

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<v Speaker 2>are entertaining, they're buying cheap things, right, cheap thrills like

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<v Speaker 2>streaming instead of going to the movies and paying you know,

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<v Speaker 2>over our dollars for a family of four. And so

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<v Speaker 2>I think we need to really get beyond the first

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<v Speaker 2>quarter of this year to really see what's happening, because

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<v Speaker 2>I think that's when we're going to see the bigger

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<v Speaker 2>effects of tariffs on inflation and consumers really pull back.

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<v Speaker 3>Dan, I've been trying to pin down how workers' wages

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<v Speaker 3>have kept up with inflation, as I've been saying. You know,

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<v Speaker 3>Torsten Slock put out a six year average showing that

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<v Speaker 3>wages are doing better than inflation. But Mark Chandler, whom

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<v Speaker 3>we just spoke with from Vandenbrooks, says in his household

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<v Speaker 3>that certainly isn't the case, and he doesn't think that

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<v Speaker 3>it looks like a great picture for consumers. How do

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<v Speaker 3>you see it?

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<v Speaker 2>Well, yes, wage growth and compensation have been slowing from

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<v Speaker 2>the peaks that we saw during the pandemic. Certainly the

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<v Speaker 2>later portion of the pandemic when we were trying to

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<v Speaker 2>get everybody back into the labor market, and you need

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<v Speaker 2>to entice them and also keep workers with compensation. But still,

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<v Speaker 2>I mean, I would say that wages are still growing

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<v Speaker 2>at a pace that's above where we were between the

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<v Speaker 2>Great Financial Crisis and the pandemic. But I would look

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<v Speaker 2>at the last GDP data where we saw real disposable

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<v Speaker 2>income grow at zero points zero percentage points annualized in

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<v Speaker 2>the third quarter. That's not a good sign. And so

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<v Speaker 2>we definitely do see slowing in wages, and for some

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<v Speaker 2>people it may be faster than others.

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<v Speaker 1>Dana Peterson of the Conference Board, thank you so much

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<v Speaker 1>for being with us this morning on the first trading

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<v Speaker 1>day of the new year.