Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is a joy
Speaker 1: Claudia Sam with us. And it's not like the fed day.
Speaker 1: We got to be adults. It's not the job's day boring, Claudia.
Speaker 1: Is there a recession? What a joy to have Doctor
Speaker 1: Sam with us here Chief Economists, News Century Advisors Today.
Speaker 1: I just heard back from Torston Slack. One are the
Speaker 1: magic things, folks, is we go back and forth with
Speaker 1: our guests through the show. If I say something stupid,
Speaker 1: Neil Dutt is the first one to email in and
Speaker 1: you see Tom, you don't know what you're talking about.
Speaker 1: Torson Slock comes back on the price of beef and
Speaker 1: Doctor Sam, I did a log chart of beef back
Speaker 1: to nineteen sixty six, and the thing that is striking
Speaker 1: is the duration of the expensive cow that's out there.
Speaker 1: What is the duration the X axis look like of
Speaker 1: our inflation we're living now.
Speaker 2: Right Well, I think you know what we've seen in
Speaker 2: recent years, really going back to the pandemic, is we've
Speaker 2: had a whole series of supply shocks of different kinds,
Speaker 2: and some of them are very severe. In the pandemic,
Speaker 2: it had like echoes and it took you know, several
Speaker 2: years to work its way through. I think if you
Speaker 2: look at beef prices, that's another one where the supply
Speaker 2: chain for beef prices, it takes long time to make
Speaker 2: more beef, right Like, so it just once you have
Speaker 2: a disruption, it's a very long tail to it, say,
Speaker 2: as opposed to chickens, which have a shorter production cycle. Like,
Speaker 2: we're learning so much and reminding so much about the
Speaker 2: physical nature of production, and so it's just one more
Speaker 2: supply shock. And frankly, as kind of came up at
Speaker 2: the press conference with Powell, you know, we've kind of
Speaker 2: had to run a bad luck in terms of one
Speaker 2: supply shock, cause shock after another, and that's kind of
Speaker 2: become the norm. And that's what we've got to be
Speaker 2: prepared for, these shocks that do have sometimes some pretty
Speaker 2: long tails to them.
Speaker 3: Claudia, you have posts on LinkedIn recently how you say
Speaker 3: that the tip reception rules of thumb are no longer working.
Speaker 3: What do you mean by that?
Speaker 1: Right?
Speaker 2: So there's we I think there's been a lot of
Speaker 2: discussion recently about you know, what's a good payroll number,
Speaker 2: right like, what's this break even rate? And discussions about well,
Speaker 2: we've got a lot less labor supply out there. We
Speaker 2: immigration really took a step down, We've got an aging population,
Speaker 2: and so what we've seen since the beginning of twenty
Speaker 2: twenty five, forty percent of the months we've had a
Speaker 2: decline in payrolls. That kind of pattern is something of
Speaker 2: a we're in a recession or the year after a recession,
Speaker 2: that's when you see those kind of pace. But actually,
Speaker 2: right now that's a labor market that's doing pretty okay
Speaker 2: because the amount the number of jobs the economy needs
Speaker 2: to create to keep up with the workers coming in
Speaker 2: is really low. It's it's practically close to zero. So
Speaker 2: that means in any month you've got weather, you've got
Speaker 2: some kind of shock. We just have some noise in
Speaker 2: the measurement of the data. We're going to have this
Speaker 2: bumping around zero, some decline, some positives, and so I
Speaker 2: think this is a normal we're in which normally should
Speaker 2: send off like recession is coming. We're in a recession,
Speaker 2: but that's not what this is. We are in a
Speaker 2: low growth type of economy. A lot of discussion already
Speaker 2: about in terms of payrolls. I think you know in
Speaker 2: a moment today where we get GDP. We got to
Speaker 2: understand that's going to start showing up those GDP numbers too. Right,
Speaker 2: low is as good as it gets.
Speaker 1: So the heart of the matter quickly here, doctor Salmon.
Speaker 1: We're going to come back with you after we get
Speaker 1: the market open. The key thing to me is the
Speaker 1: real wage. Are you suggesting we get a literal negative
Speaker 1: real wage?
Speaker 2: What the real wage discussion is? There's a lot more
Speaker 2: too that. What we've seen is the real wage is
Speaker 2: not reflecting all the productivity gains that we've had and
Speaker 2: wage growth, nominal wage growth is still slowing, so we're
Speaker 2: not seeing the gains of this having fewer workers. So
Speaker 2: we're not like in a shortage economy where the tables
Speaker 2: are turning and workers are getting the upper hand. But
Speaker 2: we're just in an economy that we've got fewer resource,
Speaker 2: fewer workers, you know, kind of adding to it, and
Speaker 2: that's going to show up in a lot of statistics.
Speaker 2: We're used to being bigger.
Speaker 1: Claudia, Sam, please stay with us as we get the
Speaker 1: market opening. Thrilled, we have Claudia Slum of New Center
Speaker 1: Advisors with this. What's the state Claudia that you see
Speaker 1: of what I'm going to call private non government investment,
Speaker 1: which is made up of any number of parts. What
Speaker 1: do you see as a state of investment.
Speaker 2: I have to say, we've you know, big picture, gotten
Speaker 2: some pretty good news on that. So our most recent
Speaker 2: reading on like core goods orders, really it was pretty
Speaker 2: broad based in terms of being a solid reading. Like
Speaker 2: if you look at the data, it's not all just AI,
Speaker 2: it's not all just data centers, right, there is more
Speaker 2: going on in terms of investment. Now, you know, more
Speaker 2: is always better, but I think there's there's a little
Speaker 2: more breadth than maybe the news gets in terms of
Speaker 2: what's happening on the investment side. So investment and still
Speaker 2: holding up, consumer spending still holding up, but it's you know,
Speaker 2: the backdrop is difficult with inflation being hotter. That really
Speaker 2: does you know, cut into the real gains.
Speaker 3: Claudia Ken, the US economy or any economy for that matter,
Speaker 3: grow consistently without population growth.
Speaker 2: So you know, the two ingredients for growth are going
Speaker 2: to be the growth of the labor force and then
Speaker 2: the growth of labor productivity. And so if you get
Speaker 2: down to a place where you're not growing the labor force,
Speaker 2: it is all about productivity, you know, And again with
Speaker 2: the immigration policy such as it is, like growth is
Speaker 2: really going to be held up by labor productivity, Like
Speaker 2: we need AI to really deliver if we're flatlining, if
Speaker 2: we're flatlining labor force growth.
Speaker 1: On Claudia, we got to run here. But we just
Speaker 1: had a fancy guy from HBS and he was talking
Speaker 1: about vibe coding. Does Claudia some vibe code?
Speaker 2: I certainly use the the AI coding to try and
Speaker 2: do some tasks. So frankly, I'm still learning how to
Speaker 2: use the tools, so I'm still faster coding on my own,
Speaker 2: but I think it's important to try it out and
Speaker 2: get better at the at the tools that are out there.
Speaker 1: It sounds like my to do list for April. Yeah,
Speaker 1: Claudia Sam, thank you, thank you, thank you so much
Speaker 1: for your commitment to what we're doing here at Bloomberg Surveillance.
Speaker 1: Can't say enough about her out of Michigan. We didn't
Speaker 1: have time there at Tark Michigan Basketball No, you know
Speaker 1: how about that? Ye, But there it is. Claudia Sam,
Speaker 1: thank you so much, and we really look forward to
Speaker 1: a job's day and a fed day. Commitment from her.
Speaker 1: Dector Samas with New Sentry advisors,