WEBVTT - What a Fed President Hears When He Goes on the Road 0:00:03.120 --> 0:00:07.840 Bloomberg Audio Studios, podcasts, radio News. 0:00:09.640 --> 0:00:12.880 To have it play. Yes, thanks for making the course 0:00:13.600 --> 0:00:13.920 with them. 0:00:15.120 --> 0:00:19.320 Yeah, so we're just getting started off the business. 0:00:19.360 --> 0:00:22.439 That's Tom Barkin, President and CEO of the Richmond Fed, 0:00:22.680 --> 0:00:25.239 one of the twelve regional banks of the Federal Reserve. 0:00:25.680 --> 0:00:29.240 He's talking to executives at Carport Central, a manufacturing firm 0:00:29.240 --> 0:00:33.160 that builds and sells carports, garages, barns, and even homes 0:00:33.200 --> 0:00:34.160 made out of metal tubin. 0:00:35.000 --> 0:00:37.080 In addition to being a voting member of the Central 0:00:37.080 --> 0:00:41.479 Bank's monetary policy body, the FOMC, Tom's responsible for actually 0:00:41.560 --> 0:00:43.800 implementing that policy in his district. 0:00:44.440 --> 0:00:45.040 So united to. 0:00:45.040 --> 0:00:46.400 Prefers himself for worlds. 0:00:46.560 --> 0:00:49.280 Yeah, he's on one of his regular listening tours, traveling 0:00:49.320 --> 0:00:51.960 by car around the Richmond Fed area, which covers DC 0:00:52.200 --> 0:00:55.440 and several Southeast states, including North Carolina where we are 0:00:55.520 --> 0:00:57.880 right now in Mount Airing, North Carolina. 0:00:58.000 --> 0:01:00.720 To be exact, Tom's invited us to come along as 0:01:00.760 --> 0:01:03.520 he learns about the businesses in his district and what 0:01:03.560 --> 0:01:06.440 they're seeing when it comes to inflation, the labor market, 0:01:06.600 --> 0:01:09.520 consumer demand, and the general economic outlook. 0:01:09.760 --> 0:01:11.840 Thank you guys for coming out. First of all, we 0:01:11.880 --> 0:01:12.280 don't know. 0:01:12.319 --> 0:01:15.199 Whatever you guys need from us, We're here to answer 0:01:15.240 --> 0:01:16.760 the questions, and we're going to tell you about our 0:01:16.800 --> 0:01:17.760 industries demand. 0:01:17.760 --> 0:01:20.600 We're interested in labor markets for insta in supply chains, 0:01:20.600 --> 0:01:21.399 for instance of pricing. 0:01:21.680 --> 0:01:23.880 Perfect to understand. 0:01:24.080 --> 0:01:26.160 You'll get to hear what a FED president hears is 0:01:26.200 --> 0:01:28.640 he embarks on one of these research trips. What are 0:01:28.680 --> 0:01:30.920 the questions he asks to get a better handle on 0:01:30.959 --> 0:01:33.759 the direction of the economy, And what kind of questions 0:01:33.880 --> 0:01:35.319 get asked to him. 0:01:35.360 --> 0:01:41.959 What is it like now that prevents from lower interests? 0:01:43.160 --> 0:01:46.160 Well, technically nothing our next meeting, but I mean, but 0:01:46.280 --> 0:01:48.080 practically it's that inflations too. 0:01:48.560 --> 0:01:51.240 We're also going to hear from local businesses themselves and 0:01:51.360 --> 0:01:55.120 learn about things like car ports, thermal underwear, and spinning 0:01:55.200 --> 0:01:56.720 yarn from plastic bottles. 0:01:57.080 --> 0:01:59.880 And we'll here's some of the challenges and opportunities facing 0:02:00.040 --> 0:02:04.640 some of America's small towns, things like shrinking populations, housing shortages, 0:02:04.680 --> 0:02:08.320 and the difficulty of finding childcare. This is odd lots 0:02:08.360 --> 0:02:09.079 on the road. 0:02:36.560 --> 0:02:42.640 Historic downtown mount Airy. There's a candy store, Let's go there. 0:02:42.720 --> 0:02:46.000 In many ways, mount Airy really is the quintessential American 0:02:46.080 --> 0:02:49.560 small town. Sitting in Surrey, County in the northwest corner 0:02:49.639 --> 0:02:52.960 of North Carolina. It was the inspiration for Mayberry, the 0:02:53.000 --> 0:02:56.760 fictional idyllic home of the Andy Griffith Show. It's also 0:02:56.880 --> 0:02:59.120 the first leg of Barkin's trip for this week. 0:02:59.360 --> 0:03:01.280 We try to go to that we haven't been the 0:03:01.320 --> 0:03:04.680 big cities work themselves. I'm there naturally to give speeches 0:03:05.080 --> 0:03:07.440 to rotary clubs or chambers of commerce, but the small 0:03:07.480 --> 0:03:09.880 towns you have to put them on your calendar. And 0:03:09.880 --> 0:03:11.480 we picked am on Eric as we hadn't been here 0:03:11.480 --> 0:03:14.760 before and we'd heard some interesting stuff about what they're 0:03:14.760 --> 0:03:15.560 doing in the workforce. 0:03:15.800 --> 0:03:18.760 Once the locations are chosen, Barkin and his team generate 0:03:18.800 --> 0:03:21.720 a list of the region's key employers, then start reaching 0:03:21.720 --> 0:03:23.720 out to set up interviews and maybe a meal or 0:03:23.720 --> 0:03:25.800 two with some of the local community leaders. 0:03:26.040 --> 0:03:28.560 We always want to find whoever the biggest businesses are 0:03:28.600 --> 0:03:31.160 and try to understand because they'll have the best input 0:03:31.240 --> 0:03:33.440 on the labor market. And then I do try to 0:03:33.440 --> 0:03:36.520 do a round table where I can of whatever the 0:03:36.520 --> 0:03:40.120 core businesses in that community. It was aquaculture and the 0:03:40.160 --> 0:03:43.440 Northern Neck. It's tourism in a place like Mount Area. 0:03:43.480 --> 0:03:46.840 I'm trying to understand the core part of every town's 0:03:46.880 --> 0:03:48.640 economy and how that's performing. 0:03:49.240 --> 0:03:52.120 Tom's not wrong about the importance of tourism in mount Airy. 0:03:52.400 --> 0:03:55.480 The Andy Griffith Museum and Mayburry themed shops on main 0:03:55.520 --> 0:03:58.240 Street inspire thousands of tourists to come every year. 0:03:58.520 --> 0:04:01.400 It's a pretty cute town. There's a downtown area with 0:04:01.480 --> 0:04:04.960 a store that sells moonshine ice cream, which was delicious. 0:04:05.280 --> 0:04:08.800 There's Mayberry RFD cop cars parked on the street, and 0:04:08.840 --> 0:04:11.800 a gospel music store is selling guitars, which you love, 0:04:11.880 --> 0:04:13.240 Joe I did. 0:04:13.800 --> 0:04:16.719 But there's also other types of businesses around too. Take 0:04:16.760 --> 0:04:20.479 for instance, Carport Central. The company makes these outdoor structures 0:04:20.480 --> 0:04:22.480 that you can use to protect your car from rain 0:04:22.640 --> 0:04:25.479 or snow or sun, but it also makes bigger things 0:04:25.560 --> 0:04:29.599 like barn dominiums or prefabricated houses. It's actually one of 0:04:29.640 --> 0:04:33.120 several companies in the immediate area that manufactures these structures, 0:04:33.400 --> 0:04:35.960 making the rural county a sort of hub for the industry. 0:04:36.279 --> 0:04:39.799 Albert Laura, the president of Carport Central, explains to Tom 0:04:39.839 --> 0:04:40.520 why that is. 0:04:41.160 --> 0:04:43.520 My brother and I've been in this industry over close 0:04:43.520 --> 0:04:47.279 to twenty four to twenty five years, so almost since 0:04:47.560 --> 0:04:51.320 it first started back in ninety nine and ninety said, 0:04:51.320 --> 0:04:55.039 and actually ninety eight ninety nine the beginnings of this industry, 0:04:55.120 --> 0:04:57.880 but it kind of grew in this area. So Surrey 0:04:57.880 --> 0:05:00.920 County is pretty much the hometown or home place, so 0:05:01.000 --> 0:05:03.800 the birthplace of this type of structure. Now there's been 0:05:03.800 --> 0:05:06.359 other structures made out of different you know, tubing, like 0:05:06.480 --> 0:05:08.760 round tubes all that that's you know on the West coast, 0:05:09.200 --> 0:05:12.400 but to be square tubing and to go to what 0:05:12.400 --> 0:05:15.160 we're doing now is different. So a start off, and 0:05:15.240 --> 0:05:17.280 you probably drove by even where you live, you see 0:05:17.279 --> 0:05:19.880 the little tops and people perked their cars, or you 0:05:20.000 --> 0:05:23.719 drive by some kind of dealer that sells outdoor equipment 0:05:23.800 --> 0:05:26.080 or something you see a little sign that as a price. 0:05:26.680 --> 0:05:28.720 Well, that's how it pretty much started in. 0:05:29.080 --> 0:05:31.359 It's an interesting time to be a FED president talking 0:05:31.360 --> 0:05:34.200 to businesses about what they're seeing day to day. Across 0:05:34.200 --> 0:05:36.880 the economy. Inflation is still above the Central banks two 0:05:36.920 --> 0:05:40.279 percent inflation target, but unemployment is still at its lowest 0:05:40.360 --> 0:05:41.039 level in years. 0:05:41.600 --> 0:05:44.320 And even though the FED isn't satisfied with progress on 0:05:44.400 --> 0:05:48.840 prices in some respects, the US economy has to fight expectations. 0:05:49.120 --> 0:05:51.200 A lot of people thought things would cool down as 0:05:51.240 --> 0:05:54.240 the FED hyped interest rates at the fastest pace in decades. 0:05:54.560 --> 0:05:56.760 Many thought we'd be in a recession by now. 0:05:57.120 --> 0:05:59.560 But that hasn't happened, and yet there's still a lot 0:05:59.560 --> 0:06:02.279 of un certainty over things like consumer demand and the 0:06:02.400 --> 0:06:04.680 ultimate impact of tighter monetary policy. 0:06:04.920 --> 0:06:07.479 And in many ways, the carport business is kind of 0:06:07.520 --> 0:06:10.240 emblematic of a lot of recent trends in the economy. 0:06:10.640 --> 0:06:13.839 Sales boomed in the aftermath of the pandemic when everyone 0:06:13.960 --> 0:06:17.039 was buying cars or adding stuff to their houses, and 0:06:17.080 --> 0:06:19.760 then there were supply chain issues, and the business has 0:06:19.800 --> 0:06:21.839 since seen some tailing off in demand. 0:06:22.240 --> 0:06:25.400 COVID hit and it was like a boom because everybody 0:06:25.440 --> 0:06:27.719 pretty much got an influx so that they had bought 0:06:27.720 --> 0:06:29.919 in our video and they bought Yeah, they needed this, 0:06:30.000 --> 0:06:31.600 and people were at home, well, I now needed a 0:06:31.600 --> 0:06:33.560 place to put my stuff in redo my bathroom. I'm 0:06:33.600 --> 0:06:35.560 going to put all my stuff in this building now, 0:06:35.960 --> 0:06:38.440 which is great, but again, you know what happened. They 0:06:38.440 --> 0:06:41.440 are supply chain issues, and so a lot of the 0:06:41.480 --> 0:06:43.479 material was delayed and then they came in and it 0:06:43.560 --> 0:06:46.560 was a higher price, and it was just a crazy time. 0:06:46.680 --> 0:06:49.480 But so for Tom the big questions right now are 0:06:49.520 --> 0:06:52.919 what carport Central is seeing in terms of pricing. Because 0:06:52.960 --> 0:06:57.200 when stuff was booming, carport manufacturers could all raise their prices. 0:06:57.600 --> 0:07:00.720 But as things normalize, it's becoming a lot more competitive. 0:07:00.960 --> 0:07:03.120 So on the rest on the car port side, does 0:07:03.160 --> 0:07:05.000 that mean that your pricing is under pressure. 0:07:05.520 --> 0:07:10.760 Yes, so we have to compete with an inferior product, 0:07:10.760 --> 0:07:14.280 but we the consumer at a certain point, they don't 0:07:14.320 --> 0:07:16.000 really take that in consider. So, you know what, I 0:07:16.040 --> 0:07:18.800 just want the lowest product, even if we tell them, well, 0:07:18.960 --> 0:07:22.239 you know, our product is you know, thirty to forty 0:07:22.360 --> 0:07:27.040 fifty percent stronger than what you're getting, and unfortunately we 0:07:27.120 --> 0:07:29.880 have to either match the price or in some cases 0:07:29.920 --> 0:07:32.800 try it undercut it. But the thing is we're paying 0:07:32.800 --> 0:07:36.200 a whole lot more for our you know, our materials 0:07:36.320 --> 0:07:38.000 and of course our designs and everything. 0:07:38.080 --> 0:07:41.560 They're they're just they're they're way above what most people 0:07:42.120 --> 0:07:43.120 are are getting. 0:07:43.160 --> 0:07:43.360 Now. 0:07:43.720 --> 0:07:46.920 To answer your question a little bit, is are pricing 0:07:47.280 --> 0:07:52.360 Our profits have gone down because of the competitors in 0:07:52.400 --> 0:07:55.240 the market that are continuously doing things wrong, so they've 0:07:55.360 --> 0:07:58.480 cheapened the product. So we were making more money pre 0:07:58.560 --> 0:08:02.520 covid COVID. Now we're the only industry that I know 0:08:02.680 --> 0:08:06.360 of that the inflation. Everybody that went up, we were 0:08:06.840 --> 0:08:08.920 the other way. When the person went down, Our pricing 0:08:08.960 --> 0:08:10.440 went down with. 0:08:10.400 --> 0:08:13.120 The inflation fighting organization. Thank you for that. 0:08:13.960 --> 0:08:17.120 But our labor is still read yeah. 0:08:16.920 --> 0:08:20.840 And labor costs and availability of workers creates an interesting 0:08:20.920 --> 0:08:24.520 dynamic in Surrey County, North Carolina has seen its population 0:08:24.640 --> 0:08:27.600 boom in the years since the pandemic. In fact, it's 0:08:27.640 --> 0:08:30.360 still one of the fastest growing states in America, but 0:08:30.400 --> 0:08:33.880 that population growth hasn't been spread evenly. In Mount Airy 0:08:33.960 --> 0:08:37.440 there are now about ten seven hundred residents, not much 0:08:37.440 --> 0:08:40.320 more than the ten four hundred people that were recorded 0:08:40.320 --> 0:08:43.080 here more than a decade ago, back in twenty ten. 0:08:43.400 --> 0:08:45.640 That means the area is having to get creative when 0:08:45.679 --> 0:08:48.320 it comes to the labor market. For instance, there's an 0:08:48.360 --> 0:08:52.000 apprentice program called Surrey Edgin Works. It's been placing hundreds 0:08:52.000 --> 0:08:55.440 of local high school students into internships and apprenticeships for 0:08:55.559 --> 0:08:59.719 things like welding, manufacturing, and teaching, providing future workers for 0:08:59.760 --> 0:09:02.920 those businesses and giving young residents a re stentistick around. 0:09:03.320 --> 0:09:05.600 So many of our small towns have a problem with 0:09:05.720 --> 0:09:08.480 population growth and workforce growth, and this is an effort 0:09:08.559 --> 0:09:11.680 to try to get local people meaningfully engaged in the 0:09:11.720 --> 0:09:14.920 workforce in places where there are lots of good jobs. 0:09:15.000 --> 0:09:16.880 And I think that's a very interesting thing that other 0:09:17.920 --> 0:09:19.720 communities might want to replicate. 0:09:20.040 --> 0:09:22.679 And businesses like carports Central have had to get more 0:09:22.720 --> 0:09:24.520 creative when it comes to their labor too. 0:09:25.000 --> 0:09:27.680 It's not as efficient when you get to a large 0:09:27.760 --> 0:09:31.000 volume production. You have to have faster equipment, you have 0:09:31.000 --> 0:09:33.760 to have more automation or more people. One of the two, right, 0:09:33.880 --> 0:09:36.800 more people, more regular equipment. But for us, we went 0:09:36.880 --> 0:09:39.200 with a little bit more automation. We still have to 0:09:39.200 --> 0:09:42.400 have more people, but automation has helped us get to 0:09:42.440 --> 0:09:45.520 where we're at streamlined. But what we've noticed is that 0:09:45.840 --> 0:09:49.520 at the beginning, say last year, we were working forty 0:09:49.559 --> 0:09:53.280 five to fifty maybe sixty hours of some cases, you know, Saturdays, 0:09:53.840 --> 0:09:56.880 half Sundays, one shift. We wanted to cut back to 0:09:57.000 --> 0:10:00.000 forty hours, and we didn't want them to work on weekends. 0:10:00.480 --> 0:10:03.200 But we still have a lot of demand, so we 0:10:03.320 --> 0:10:06.520 had to get more efficient in our processes. And the guys, 0:10:06.600 --> 0:10:09.960 you know, they were very very hesitant at first because 0:10:10.000 --> 0:10:12.160 obviously they were used to getting a fifty hour pay 0:10:12.240 --> 0:10:14.040 check verse sixty hour overtime. 0:10:14.600 --> 0:10:16.640 But we told them, look, let's try this. 0:10:17.160 --> 0:10:19.160 We want you to spend more time with your family, 0:10:19.679 --> 0:10:21.320 you know, we want you to enjoy. We don't want 0:10:21.360 --> 0:10:23.400 you to have to stress having to come in and 0:10:23.400 --> 0:10:26.600 finish this, or we don't want you to rush through 0:10:26.640 --> 0:10:27.480 it where it's not. 0:10:28.960 --> 0:10:31.040 The exact quality we want. 0:10:30.559 --> 0:10:34.200 So yeah, so now that's changed a lot. And I 0:10:34.200 --> 0:10:38.880 think that's probably why back Tommy's point is, our turnover 0:10:38.960 --> 0:10:42.679 rate isn't as much as it probably is for other manufacturers. 0:10:42.960 --> 0:10:45.480 So Carport Central has been able to adjust to some 0:10:45.520 --> 0:10:47.280 post pandemic pressures. 0:10:47.000 --> 0:10:49.640 But there are still some restraining factors on its business. 0:10:50.000 --> 0:10:53.319 Take for instance, banks and the availability of credit. Not 0:10:53.440 --> 0:10:56.280 only have interest rates surge as the FED fight's inflation, 0:10:56.600 --> 0:10:59.160 but banks have also been pulling back on some loans. 0:10:59.440 --> 0:11:02.320 What's the constraint on your growth right now? Is it 0:11:02.360 --> 0:11:03.439 getting the materials? 0:11:03.559 --> 0:11:06.720 Is it availability of contractors? 0:11:06.840 --> 0:11:06.920 Like? 0:11:07.679 --> 0:11:10.040 What what's stopping you from selling even more? 0:11:10.760 --> 0:11:15.480 I guess for us it's gonna be more financial institutions 0:11:15.559 --> 0:11:16.959 understanding our business more. 0:11:17.800 --> 0:11:19.920 I think the supply chain issue. 0:11:20.040 --> 0:11:24.440 For us, it's it's it's okay because we have access 0:11:24.480 --> 0:11:30.120 to different supplies, but it's more of having a backing 0:11:30.200 --> 0:11:34.080 of a financial institution for us. 0:11:32.840 --> 0:11:37.720 So credit, but our turnaround time in our industry, luckily 0:11:37.800 --> 0:11:40.680 it is pretty quick. But because of the fabrication time 0:11:40.760 --> 0:11:44.920 and their time scheduled for commercial projects, they don't they 0:11:44.960 --> 0:11:47.120 are not able to pay us let's say within maybe 0:11:47.200 --> 0:11:50.440 ninety days, and we are credit terms are say net 0:11:50.480 --> 0:11:51.680 thirty net forty five. 0:11:52.640 --> 0:11:55.160 Uh So basically we have to have a reserve of cash. 0:11:56.000 --> 0:11:59.760 You know it'll come in, but it's just a delayed situation. 0:12:00.440 --> 0:12:03.880 The growth that we're seeing, we're actually being restrained because 0:12:03.920 --> 0:12:06.920 of not having access to the capital that we need 0:12:06.960 --> 0:12:07.920 to Actually. 0:12:08.200 --> 0:12:10.440 What we're telling you when you go talk to them 0:12:10.480 --> 0:12:11.760 and say I got a business and I got a 0:12:11.760 --> 0:12:12.920 lot of demand and I just need. 0:12:12.880 --> 0:12:15.079 A little more capital, well, I think right now it's 0:12:15.080 --> 0:12:17.280 more mostly because of the way the economy is going. 0:12:17.679 --> 0:12:22.320 They're really they're not as free you know, telling you, hey, 0:12:22.360 --> 0:12:23.320 come on in, let's help it. 0:12:23.320 --> 0:12:25.320 It's more like let me see if I can. 0:12:25.480 --> 0:12:26.959 I don't know if I can. You know, that kind 0:12:26.960 --> 0:12:28.520 of situation, not like it was before. 0:12:28.679 --> 0:12:31.640 But it's access rather than rate because you could say, oh, 0:12:31.640 --> 0:12:33.600 they'll give it to me it's just costing me too much. 0:12:34.040 --> 0:12:36.280 Yeah, I think it's more access. I think people are 0:12:36.640 --> 0:12:37.440 more reserved with that. 0:12:37.559 --> 0:12:40.640 And as we've seen before, even as the company gets bigger, 0:12:40.920 --> 0:12:42.440 that creates a new set of challenges. 0:12:42.720 --> 0:12:46.760 But with the other challenges that we're facing, competition, but 0:12:46.840 --> 0:12:48.280 also the lending part. 0:12:48.360 --> 0:12:49.680 Getting to that, you know. 0:12:49.679 --> 0:12:51.440 It costs money for an AUDI, you know, it cost 0:12:51.600 --> 0:12:53.360 you have to have a team of CPAs you know, 0:12:53.400 --> 0:12:56.800 you have to have a financial you know, it's more money, 0:12:56.840 --> 0:13:02.360 more you know, income that's that's dedicated to that instead 0:13:02.360 --> 0:13:04.600 of dedicated to equipment and growth. 0:13:04.960 --> 0:13:07.280 So that's where and I don't know, maybe you've seen 0:13:07.320 --> 0:13:10.960 other banks of other companies and internal processes too. For 0:13:11.080 --> 0:13:13.920 on the accounting side, you know, growing so much that 0:13:14.000 --> 0:13:16.720 we were growing twenty five thirty five percent every year 0:13:16.760 --> 0:13:20.840 for the past five six years. But then we got 0:13:20.840 --> 0:13:23.320 to that point where okay, quick books can only do 0:13:23.400 --> 0:13:27.280 so much, right, so we went to an ERP system. 0:13:27.360 --> 0:13:31.200 You know, going to that EP system has been a 0:13:31.400 --> 0:13:35.280 very very hard struggle over a year now try and implement. 0:13:35.360 --> 0:13:38.120 Nobody address that. So that's what also. 0:13:38.200 --> 0:13:40.840 For those of you wondering, an ERP system is basically 0:13:40.920 --> 0:13:44.600 software used to organize a company's finances, supply chain management, 0:13:44.679 --> 0:13:47.520 and a lot more. The reason this is familiar to Tom 0:13:47.559 --> 0:13:49.240 is because not only does he spend a lot of 0:13:49.240 --> 0:13:51.640 his days on the road talking to businesses about stuff 0:13:51.679 --> 0:13:54.719 exactly like this, but he also spent many years at McKenzie, 0:13:54.760 --> 0:13:57.120 the consulting giant before he joined the Richmond Fed. 0:13:57.520 --> 0:13:59.920 That background is one reason he takes such an intro 0:14:00.200 --> 0:14:02.600 in the nuts and bolts of local companies. But what 0:14:02.640 --> 0:14:04.920 does he do with the information that he gets from 0:14:04.960 --> 0:14:07.520 these meetings. At the end of the first day of 0:14:07.559 --> 0:14:10.000 his trip, we sat down with Tom to talk about 0:14:10.000 --> 0:14:14.160 what he'd heard. You know, the town's commerce department says, 0:14:15.000 --> 0:14:17.720 we have to compete with other areas in order to 0:14:17.760 --> 0:14:21.320 attract developers. Or you speak to the head of a 0:14:21.320 --> 0:14:24.280 carport company and they say, well, it's difficult to get 0:14:24.320 --> 0:14:26.800 financing for what we're building here. 0:14:27.160 --> 0:14:30.200 Well, sometimes what I learn is confirmatory, sometimes what I 0:14:30.280 --> 0:14:33.200 learn is new. We had a dinner where we talked 0:14:33.240 --> 0:14:35.720 to a bunch of people about the labor market, and 0:14:35.760 --> 0:14:39.480 what they told me, which was news, was that they're 0:14:39.520 --> 0:14:43.400 still short workers in teaching, in healthcare, in state and 0:14:43.480 --> 0:14:45.400 local government. And you know, that's where most of the 0:14:45.480 --> 0:14:47.760 jobs have been added over the last year, and one 0:14:47.760 --> 0:14:50.280 of the big questions is is that cycle complete or not. 0:14:50.920 --> 0:14:53.400 They sort of sent the message it's not yet complete, 0:14:53.440 --> 0:14:55.560 which is helpful, you know, to know there's still a 0:14:55.560 --> 0:14:58.240 little bit of juice left in the job market. We 0:14:58.280 --> 0:15:01.800 had a conversation with a carport manuf facture and they're 0:15:01.840 --> 0:15:05.080 feeling significant price pressure. And if you care about inflation, 0:15:05.160 --> 0:15:08.560 that's good to know and again maybe confirmatory that on 0:15:08.640 --> 0:15:12.400 the good side, there's still price pressure coming. This housing 0:15:12.440 --> 0:15:15.040 thing is very interesting in terms of shelter costs. Is 0:15:15.160 --> 0:15:18.240 housing availability getting plentiful enough that you can imagine shelter 0:15:18.320 --> 0:15:21.160 costs coming down or is it still tight enough that 0:15:21.200 --> 0:15:23.240 we have a challenge. And so you know, I try 0:15:23.240 --> 0:15:25.080 to bring what I learn in the economy into the 0:15:25.160 --> 0:15:29.000 room at the FOMC and hopefully am able to build 0:15:29.040 --> 0:15:31.960 confidence when I do twenty of these conversations, not just 0:15:32.080 --> 0:15:34.640 one that I learned something about what's happening to goods 0:15:34.640 --> 0:15:37.840 inflation and services inflation and shelter inflation, that I know 0:15:37.880 --> 0:15:40.240 what's happening to the labor market into wages, and I 0:15:40.280 --> 0:15:42.760 have a real time sense of what's happening to demand. 0:15:42.840 --> 0:15:44.960 So that's that's what I'm learning. And you will have 0:15:45.000 --> 0:15:48.520 noted that I asked thirty those questions today, many of 0:15:48.560 --> 0:15:50.800 them off cycle. You know, as I meet somebody right 0:15:50.840 --> 0:15:53.040 before a speech or before I talk, I'll turn to 0:15:53.080 --> 0:15:54.840 them and ask how their business is doing and try 0:15:54.920 --> 0:15:56.080 to see what I can learn. 0:15:56.320 --> 0:15:59.520 For Birken, the anecdote learns from local businesses help to 0:15:59.560 --> 0:16:02.720 supplement and all the official data that DEFED gets constantly, 0:16:03.000 --> 0:16:06.920 things like non farm payrolls, weekly jobless claims, and much more. 0:16:07.320 --> 0:16:09.480 So it's interesting to ask him if he ever sees 0:16:09.600 --> 0:16:11.920 or hears things on the ground before they show up 0:16:11.960 --> 0:16:14.760 in the official data. So you mentioned when we talked 0:16:14.760 --> 0:16:18.479 about the sort of anecdotal learnings or from the examples 0:16:18.480 --> 0:16:23.880 you gave were sort of either confirmatory or maybe informed 0:16:23.880 --> 0:16:26.480 something at the margins, like okay, maybe there's still more 0:16:26.600 --> 0:16:29.800 juice on the public sector for labor side. How often 0:16:29.960 --> 0:16:33.400 does it come up where people will start consistently saying 0:16:33.480 --> 0:16:35.800 something that, oh, this is really not showing up in 0:16:35.880 --> 0:16:38.080 the data yet, and it's sort of an early signal 0:16:38.120 --> 0:16:40.440 of something that later on you say, yep, there it 0:16:40.480 --> 0:16:41.520 is playing out in the numbers. 0:16:41.800 --> 0:16:44.800 I'd say every quarter there's something like that. So in 0:16:44.840 --> 0:16:47.240 the fourth quarter last year, in October, you may remember, 0:16:47.280 --> 0:16:50.960 the numbers were really really frothy, and I wasn't hearing 0:16:50.960 --> 0:16:53.760 any of that in the market. Actually came out and said, 0:16:54.200 --> 0:16:57.280 that's just not consistent with what i'm The inflation numbers, know, 0:16:57.480 --> 0:17:01.040 the demand numbers, the consumer spending numbers, retail sales numbers 0:17:01.040 --> 0:17:03.880 were very fraud the that's not consistent. I'd say today. 0:17:04.000 --> 0:17:07.040 We just got a retail sales report recently that was 0:17:07.119 --> 0:17:11.000 quite strong, and I'm hearing decent consumer spending. I'm not 0:17:11.080 --> 0:17:14.639 hearing that strong. Maybe I'll be proven wrong by the 0:17:14.640 --> 0:17:17.280 time this errs, but you know that's what I'm hearing. 0:17:17.520 --> 0:17:20.240 I do hear things that are different, and then i'd 0:17:20.280 --> 0:17:23.920 hear some number of things that are in advance. May 0:17:23.960 --> 0:17:28.320 of twenty twenty in Bristol, Tennessee opened, Virginia wasn't open. 0:17:28.400 --> 0:17:29.960 It was right at the end of the first part 0:17:30.000 --> 0:17:33.000 of COVID, and I talked to a developer who said, oh, 0:17:33.000 --> 0:17:35.160 I got the malls are packed. And that was before 0:17:35.160 --> 0:17:38.040 any of us knew that the opening of the economy 0:17:38.040 --> 0:17:41.240 would lead to that kind of spending. That's a good 0:17:41.240 --> 0:17:43.959 example I'll also get a reasonable amount of i'll call 0:17:44.000 --> 0:17:48.160 it segment specific information. You know, how our higher income 0:17:48.240 --> 0:17:51.320 consumers thinking versus lower income consumers, or what's the job 0:17:51.359 --> 0:17:54.840 market for professionals versus skilled trades, and so the overall 0:17:54.920 --> 0:17:57.359 number may be the same, but you'll get some insight 0:17:57.400 --> 0:17:59.159 into what's really driving it. 0:17:59.400 --> 0:18:03.040 While gathering information to supplement his data, the folks he 0:18:03.119 --> 0:18:06.160 talks to are also learning from him. Something we saw 0:18:06.320 --> 0:18:08.640 over and over again on our trip to North Carolina 0:18:08.920 --> 0:18:11.160 is that people are just fascinated by what the FED 0:18:11.200 --> 0:18:13.840 actually does and how it works. And at a time 0:18:13.880 --> 0:18:16.520 when inflation is still running above target and there's still 0:18:16.560 --> 0:18:18.840 a lot of doubt about the direction of the economy, 0:18:19.080 --> 0:18:21.240 there are more questions than ever about what the FED 0:18:21.320 --> 0:18:21.680 is doing. 0:18:22.000 --> 0:18:24.840 Obviously, everyone wants to know where interest rates are heading, 0:18:24.840 --> 0:18:27.320 but they also want to know what other businesses are saying, 0:18:27.400 --> 0:18:30.520 what the Fed's hearing, and crucially, how the FED processes 0:18:30.720 --> 0:18:33.359 all that information. So these trips are not just a 0:18:33.440 --> 0:18:35.760 chance for business leaders to tell a FED president what 0:18:35.920 --> 0:18:38.680 they think. They're also an opportunity to find out what's 0:18:38.720 --> 0:18:41.560 on his mind and get their own questions answered. More 0:18:41.600 --> 0:18:42.720 on that in our next segment. 0:19:02.119 --> 0:19:05.800 I think we'd love it sooner by j Nuts. 0:19:06.640 --> 0:19:10.080 Welcome to the Winston Salem Rotary Club's weekly luncheon. This 0:19:10.200 --> 0:19:12.679 week's guest speaker is, of course, Tom Barkin. 0:19:13.640 --> 0:19:16.320 Tracy, I'm glad we finally figured out what a rotary 0:19:16.359 --> 0:19:16.680 club is. 0:19:17.520 --> 0:19:20.080 Yeah, I had this sort of vague idea in my mind, 0:19:20.240 --> 0:19:22.080 but I had to look it up to It is 0:19:22.119 --> 0:19:25.840 a society of I would say, civic minded people who 0:19:25.880 --> 0:19:30.080 meet regularly to network and take on some community projects. 0:19:29.680 --> 0:19:30.400 About the community. 0:19:30.560 --> 0:19:34.280 I felt like every week dot Com I learned something 0:19:34.320 --> 0:19:36.160 about my city that I didn't have there. 0:19:36.400 --> 0:19:37.679 That's cool. 0:19:38.520 --> 0:19:40.879 The Winston Salem Rotary Club has been going on for 0:19:40.920 --> 0:19:42.879 more than one hundred years, all the way back to 0:19:42.880 --> 0:19:46.960 when Winston Salem was basically cigarette central. Today, driving around 0:19:47.040 --> 0:19:49.879 Winston Salem, I'm pretty sure we saw more vineyards and 0:19:49.920 --> 0:19:51.639 breweries than we did tobacco fields. 0:19:52.040 --> 0:19:54.360 So please give Tom Barkin a warm welcome. 0:19:55.359 --> 0:19:57.720 As part of his trips around the Richmond Fed District, 0:19:57.920 --> 0:20:01.359 Barkin often speaks to local business groups and societies, giving 0:20:01.400 --> 0:20:04.320 his regular stump speech about the state of the economy. 0:20:04.400 --> 0:20:08.520 Thanks Chris, I appreciate that advertisement. So it's great to 0:20:08.600 --> 0:20:11.720