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Speaker 1: Hello, Odlots listeners producer Carmen here. This episode was recorded

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Speaker 1: on October twelfth at the screen Time Conference in California,

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Speaker 1: and before that UAW reached a tentative agreement with Ford

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Speaker 1: to end their strike. Thanks for listening.

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Speaker 2: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 2: You are going to be listening to a special episode

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Speaker 2: of the Odd Lots Podcast that we recorded live at

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Speaker 2: the Bloomberg screen Time Conference in Los Angeles in early October.

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Speaker 4: That's right, Oddlots Takes Hollywood. We are speaking to one

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Speaker 4: of our favorites, Omeor Shereef of Inflation Insights, and we

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Speaker 4: are talking to him about the macro impact of some

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Speaker 4: of the recent strikes we've seen this summer from the

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Speaker 4: Screenwriters Guild, from the Actors Guild, as well as the

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Speaker 4: United Autoworkers. Take a listen.

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Speaker 2: Omaya is one of our favorite economists that we speak

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Speaker 2: to regularly on our podcast, where we typically cover like markets, finance,

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Speaker 2: and economic stuff.

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Speaker 3: That's right, and.

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Speaker 4: Today we're going to try to join the two worlds

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Speaker 4: of entertainment and Hollywood with more of the macroeconomic stuff

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Speaker 4: that we do on a day to day basis.

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Speaker 2: Right, So obviously one of the big macro stories here

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Speaker 2: is the ongoing strikes. We got the news last night

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Speaker 2: the actors are continuing the strikes despite the fact that

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Speaker 2: you know, maybe it was expected to wrap up sooner.

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Speaker 2: There's also more strike activity nationally. We also found out

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Speaker 2: yesterday Forward expanding its strikes. So we're going to try

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Speaker 2: to balance out the two stories. Talk about what we've

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Speaker 2: learned so far from the economic impact here locally in

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Speaker 2: LA and southern California, and what that might say for

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Speaker 2: the rest of the country.

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Speaker 3: Yeah, let's do it.

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Speaker 2: Right, Omere, thank you so much for coming here and

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Speaker 2: making the time and chatting with us.

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Speaker 5: Yeah. Nice to be back again. So let's just.

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Speaker 2: Start with like a basic question, which is, you know,

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Speaker 2: the two strikes one just wrapped up.

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Speaker 5: Is it going up yet in economic data?

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Speaker 6: Yeah, so, I mean, we have some national reports we

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Speaker 6: can look at that show some of the impact of

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Speaker 6: at least the writer's strike. There's some data out there

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Speaker 6: right now in terms of work stoppages. So any strike

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Speaker 6: that's more than a thousand people gets recorded by the government,

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Speaker 6: and some of that data started to show that about

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Speaker 6: eleven thousan five hundred writers were on strike beginning in

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Speaker 6: the June number. So we have seen it over the months,

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Speaker 6: and we've now started to see that impact in the

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Speaker 6: same Work Stoppages report, for example, showing one hundred and

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Speaker 6: sixty thousand actors on strike as well, and of course

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Speaker 6: it records a whole lot of other strikes as well,

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Speaker 6: so that's probably the main place where we see it.

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Speaker 6: We haven't really seen it quite as much in terms

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Speaker 6: of unemployment just yet, and there's a few reasons for that.

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Speaker 6: I mean, you can imagine, especially with the actors strike.

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Speaker 6: You know, actors also tend to work other jobs, right,

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Speaker 6: There's very few full time actors, and so if they're

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Speaker 6: working other jobs and they're making money, they won't be

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Speaker 6: counted as unemployed. And in fact, in one of the surveys,

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Speaker 6: the Household Survey, depending on how you answer the question

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Speaker 6: of out you know, whether you have a job, where

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Speaker 6: you at your job, are you available to work? There's

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Speaker 6: sort of a list of questions you have to answer

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Speaker 6: and in order to be counted as unemployed, you sort

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Speaker 6: of have to hit all three of these questions perfectly.

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Speaker 6: So unless people answer it in a certain manner, they

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Speaker 6: will not be counted as being unemployed. The one area

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Speaker 6: also within the household survey where you do see the

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Speaker 6: impact is, you know, the number of people who have

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Speaker 6: a job but who are not.

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Speaker 5: At work due to a labor dispute.

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Speaker 6: So that is a very very specific category that they

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Speaker 6: do capture in the BLS, and that is starting to

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Speaker 6: show some of the impact right now. But you know,

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Speaker 6: more broadly, we haven't really seen a big increase, for example,

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Speaker 6: in jobless claims. We haven't seen a huge move higher

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Speaker 6: in the unemployment rate data itself, whether that's nationally or

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Speaker 6: even really within LA or California.

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Speaker 4: Wait, can I ask a very basic question, Maybe it's

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Speaker 4: a stupid question, but what does the literature tell us

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Speaker 4: about whether strike action is inflationary or deflationary? Because I

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Speaker 4: could see you you could possibly argue it both ways.

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Speaker 4: So if it impacts output, then maybe prices go up

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Speaker 4: because supply of a given thing is in shortage. And

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Speaker 4: of course if it's successful, then presumably wages for some

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Speaker 4: workers go up. But on the other hand, if things

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Speaker 4: aren't getting done, if things aren't getting made, then you

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Speaker 4: would assume that's a hit to economic activity. Maybe people

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Speaker 4: aren't getting paid, so maybe it's deflationary in that way.

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Speaker 5: Yeah.

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Speaker 6: So one of the interesting things about the strike activity

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Speaker 6: is it typically tends to follow inflationary periods. So it's

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Speaker 6: not that you know, the strike itself isn't causing prices

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Speaker 6: to move higher. It's that there may have been shocks

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Speaker 6: like so for example, the well shock now the last

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Speaker 6: couple of years with COVID that cause prices to shoot up,

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Speaker 6: workers fall behind, and then eventually that leads to more

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Speaker 6: and more strike activity. So that's the first thing I

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Speaker 6: would say that it really tends to follow big price increases.

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Speaker 5: The question of whether then eventually the.

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Speaker 6: Pay raises you get afterwards, you know, typically you don't

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Speaker 6: that as much in the inflation data. I think this

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Speaker 6: time certainly could be different, given you know, we've got

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Speaker 6: strikes on multiple fronts, and I think the auto sector

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Speaker 6: is the most obvious answer. But that's partly because we're

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Speaker 6: still recovering from a lot of the supply chain issues

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Speaker 6: that you know, you guys have talked about on the

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Speaker 6: show many many times. So when you think about autos,

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Speaker 6: for example, you know, auto production is only just in

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Speaker 6: the last six seven months gotten back to where it

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Speaker 6: used to be before COVID. So to get a hit

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Speaker 6: now to production is potentially someplace where you could see

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Speaker 6: inflation pop up for new cars, for used cars, and

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Speaker 6: other places, but typically you don't see as much of

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Speaker 6: that happen post the resolution of the strike.

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Speaker 4: Right, Okay, well on this note, you know, I realized

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Speaker 4: we are at an industry conference, so I won't ask

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Speaker 4: you to opine on whether or not the writers and

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Speaker 4: the actors' strikes are justified, but walk us through what

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Speaker 4: the actual data tells us about wages for this particular

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Speaker 4: sub sector of worker.

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Speaker 6: When I started digging into this, I was actually very

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Speaker 6: surprised to find out some of these numbers. And I

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Speaker 6: think in because when you know, I remember hearing about

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Speaker 6: the actors strike initially, and I just remember thinking, well,

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Speaker 6: you know what, I think, Tom Cruise is gonna be

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Speaker 6: fine about a few months of pay, right, But what

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Speaker 6: you generally don't tend to think about is all the

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Speaker 6: other thousands upon thousands of actors who are not you know,

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Speaker 6: the A list, celebrities who are in the magazines and

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Speaker 6: so on. And so I started to look through the

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Speaker 6: wage datum, and I said, you know how much do

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Speaker 6: actors actually make. So, for those of you who can

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Speaker 6: see this chart, the top chart is just showing you

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Speaker 6: a very specific industry, right, So this is the motion

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Speaker 6: picture and video industry. This is where you'll find actors,

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Speaker 6: but also everything from you know, folks who work in

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Speaker 6: lighting to editing and so on.

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Speaker 2: And actors are way down there, way down that lawyers are.

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Speaker 5: They are.

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Speaker 6: Yeah, they're just below data entry and amusement park workers

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Speaker 6: and so on. And they make about and you know,

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Speaker 6: sixteen dollars and seventy cents, and that's the median. So

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Speaker 6: half of them make more than that, half make less

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Speaker 6: than that, but sixteen seventy is where they fit in. Yeah,

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Speaker 6: number one, you would not be surprised, you know, you're

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Speaker 6: not gonna be surprised, is lawyers.

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Speaker 5: In the motion picture industry. But actors are way down.

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Speaker 6: They're in the bottom twenty percent of all workers when

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Speaker 6: it comes to wages in the motion picture and video industry.

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Speaker 6: And you know, another chart I wanted to look at

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Speaker 6: was to say, okay, well, if this is the median,

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Speaker 6: how much do people at the bottom end make versus

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Speaker 6: the top end? And you know, the second chart down

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Speaker 6: there shows you actually the green bars of the US

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Speaker 6: as a whole, so all actors across the United States,

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Speaker 6: and the red is specifically for the LA Long Beach

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Speaker 6: Annaheim area, so that's a local look, and you can

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Speaker 6: see locally, the median is actually only about fifteen dollars

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Speaker 6: and seventy cents for the LA area, so below the

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Speaker 6: sixteen seventy we see for the industry as a whole.

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Speaker 6: But look at how little variation there is at the

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Speaker 6: bottom end, right like you, if you go towards the

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Speaker 6: bottom ten percent, you're still only at about fifteen dollars

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Speaker 6: and sixty cents, so only about a ten cent difference

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Speaker 6: between the bottom ten percent and the middle. Even at

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Speaker 6: the seventy fifth percentile, you only move up to about

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Speaker 6: sixteen dollars and seventy cents, only about a buck more

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Speaker 6: per hour.

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Speaker 5: Fast forwards to the ninetieth percent.

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Speaker 6: Tell now you're up into the seventies and for the

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Speaker 6: US as a whole, you up to over one hundred

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Speaker 6: and ten bucks. So you really you know, if you're

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Speaker 6: an actor, essentially, unless you are in that top ten percent,

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Speaker 6: and quite honestly probably that top one percent, your median

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Speaker 6: wage is probably going to be around that fifteen to

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Speaker 6: sixteen dollars range, whether that's a local number or whether

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Speaker 6: it's it's national for as a whole.

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Speaker 2: One of the reasons we love talking to Omer is

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Speaker 2: the level of data that he.

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Speaker 3: Becomes in clips with the numbers.

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Speaker 2: Tracy once wrote an amazing article about mayonnaise inflation and

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Speaker 2: omaar like, do all the different like categories within He's like, well,

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Speaker 2: you might want to look at like the fats and

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Speaker 2: oils section of the Producer Price Index and then the PCE.

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Speaker 2: It's you know, mayonnaise is captured here one of the things.

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Speaker 2: And you mentioned it that many actors have other jobs,

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Speaker 2: so even if they're striking, they're not necessarily going to

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Speaker 2: be counted as unemployed. And looking at these wages, I imagine

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Speaker 2: that these other jobs that they could pick up, service

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Speaker 2: industry jobs pay pretty close like they're take you a

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Speaker 2: big economic hit.

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Speaker 5: Yeah, that's right.

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Speaker 6: So you know, here I wanted to take a look

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Speaker 6: at some of these other areas where you would see,

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Speaker 6: you know, again, as I mentioned, very few actors are

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Speaker 6: full time actress, right, it's part time. You're taking other jobs,

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Speaker 6: and so I took a look at sort of some

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Speaker 6: of you know, just picked out randomly. Some of the

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Speaker 6: areas where you see actors tend to work, and so

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Speaker 6: you'll find places like you know, occupations like you know, bartender, servers,

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Speaker 6: real estate agents is a very popular one in La

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Speaker 6: at least, and so here you can see this is local.

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Speaker 6: These numbers are for local for LA County, and so

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Speaker 6: again the actors fifteen seventy an hour. Servers are about

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Speaker 6: fifteen dollars and fifteen cents an hour roughly, bartenders you

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Speaker 6: know a little bit above that, about fifteen thirty five,

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Speaker 6: substitute teachers twenty three bucks an hour, real estate agents

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Speaker 6: around thirty one dollars. So you know, that's why kind

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Speaker 6: of the medium is as low as it is, because

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Speaker 6: some of the other occupations here are you know, whether

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Speaker 6: it's bartending or working as at a resta, also tend

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Speaker 6: to be on that lower end of the overall spectrum.

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Speaker 6: So that's partly why you're seeing that number be so low.

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Speaker 6: But again, I think when you look at that distribution,

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Speaker 6: unless you are in that top ten percent, the bottom

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Speaker 6: ninety is is going to be about fifteen to sixteen

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Speaker 6: bucks an hour, which tells you just yea, how tough

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Speaker 6: it is to kind of make it in that industry

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Speaker 6: because there is not like if you're in the middle,

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Speaker 6: you're making fifteen twenty bucks more than if you were

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Speaker 6: at the bottom, and it's there's basically no difference.

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Speaker 2: There's the bottom in the top, and most people are

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Speaker 2: in the bottom.

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Speaker 7: Yes, that's my takeaway from your charge.

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Speaker 3: You knew I used to be a substitute teacher, right, Yes,

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Speaker 3: I was aware of this. Just were you also a

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Speaker 3: struggling actor?

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Speaker 2: I was actually kind of but no, just see I

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Speaker 2: give a shout out to the substitut teachers as a

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Speaker 2: former soaker.

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Speaker 3: Okay, fair enough.

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Speaker 4: So one thing, actually, going to Joe's point about mayonnaise

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Speaker 4: and all the different data sets that you can look up,

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Speaker 4: one of the things I learned about inflation statistics doing

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Speaker 4: that article was that there are these qualitative adjustments that

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Speaker 4: the Bureau of Labor Statistics does on these numbers where

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Speaker 4: they will look at probably not mayonnaise, but they'll look

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Speaker 4: at something like a refrigerator and say, well, a modern

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Speaker 4: refrigerator is so much better than a fridge from nineteen

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Speaker 4: eighty five that can do so many more things, and

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Speaker 4: so we have to adjust the inflation calculation. I always wondered,

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Speaker 4: for something like movies or TV, can they do the

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Speaker 4: same type of qualitative adjustment? How would you actually measure that?

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Speaker 6: Yeah, to the best of my knowledge, they don't do anything.

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Speaker 6: Services in general tend to be very, very difficult to

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Speaker 6: quality adjust you know. Some exceptions can be things like

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Speaker 6: your cell phone service, where you know your wireless plan,

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Speaker 6: you get a certain amount of data through it. If

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Speaker 6: that data increases or decreases, they can sort of measure

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Speaker 6: what that would quote unquote cost. For movies, though I

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Speaker 6: think it's it's as far as I know, they don't

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Speaker 6: do anything with that, And in general, services activities are

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Speaker 6: are very tough to do, so they really try to

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Speaker 6: stick with with goods as you mentioned, like you know, televisions, refrigerators, cars.

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Speaker 6: You know, the new model your car comes out, it's

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Speaker 6: got more bells and whistles, and the last one. They

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Speaker 6: can look at how much the manufacturers spent on adding

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Speaker 6: you know, better technology to that vehicle and sort of

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Speaker 6: remove that from the price to say, hey, this is

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Speaker 6: the quality adjustment services though it is it's very difficult

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Speaker 6: to do.

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Speaker 4: Okay, So the BLS isn't watching all the new movies

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Speaker 4: and going wow, these special effects are so much better.

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Speaker 3: We need to adjust our inflation methody.

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Speaker 6: No, it's a good question. I will ask them when

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Speaker 6: I get back to work tomorrow.

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Speaker 2: But it's just the other thing we've learned, by the way,

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Speaker 2: is that the BLSA is great. They'll just you could

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Speaker 2: call them up and just ask a question about the

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Speaker 2: economic data.

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Speaker 5: They'll walking through. They're happy to chat about it all

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Speaker 5: the time. You mentioned.

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Speaker 2: Okay, so unemployment not really showing up in the data.

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Speaker 2: Are there any other sort of like statistics in the

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Speaker 2: regional economy where you can see some effect from work

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Speaker 2: stoppages or certain types of sectors. I mean, I have

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Speaker 2: to imagine, you know, obviously the not shooting effects more

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Speaker 2: than actors effects, makeup people, affects, other production people, are

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Speaker 2: other other areas or other data sets you can look

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Speaker 2: at to see how the strike is having an impact

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Speaker 2: or percolating up there.

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Speaker 5: Yeah.

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Speaker 6: So actually, you know, if you look at industry employment numbers, right,

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Speaker 6: so specifically here for California, and you can look at,

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Speaker 6: for example, sort of the film and TV industry, and

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Speaker 6: you can tack on also there's another industry that captures

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Speaker 6: independent writers and performers.

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Speaker 5: So if you kind of combine.

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Speaker 6: Those two big industries and say what's going on to

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Speaker 6: the job growth in those two sectors in California since April,

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Speaker 6: So the strike started early May, the writers strike at

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Speaker 6: least since April combined, the lost about seventeen thousand jobs,

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Speaker 6: and most of that has been in you know, the

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Speaker 6: motion picture industry, less so on the independent writer side,

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Speaker 6: but it is clear there that you're seeing some impact

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Speaker 6: in terms of layoffs that are happening.

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Speaker 5: So that's one area.

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Speaker 6: But the second area also is that activity in general

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Speaker 6: in the industry has been contracting probably for the last

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Speaker 6: year and a half. So you know, I'm not gonna

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Speaker 6: you know, you mentioned earlier about are the strikes justified

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Speaker 6: or not. I don't know if I want to go

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Speaker 6: down into that rabbit hole, but what I will say

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Speaker 6: is that in general, I really like the way Ellen Stetsman,

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Speaker 6: who is the chief negotiator for the Writer's Guild. You know,

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Speaker 6: their criticiding is the writers about striking at a time

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Speaker 6: when things are tough for the streaming services and so on,

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Speaker 6: and she said, look, our job is to ensure that

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Speaker 6: our guild members have good jobs and share in, you know,

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Speaker 6: the value that we create. As writers regardless of whatever

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Speaker 6: it is that the industry is doing and what the

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Speaker 6: industry has been doing in terms of film and TV

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Speaker 6: is and this you mentioned shoot days earlier, so this

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Speaker 6: is a good number to look at. From twenty fifteen

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Speaker 6: to twenty nineteen, before COVID hit, the average number of

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Speaker 6: shoot days in California every quarter was about nine five

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Speaker 6: hundred shoot days. So this is ever real quick question.

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Speaker 6: Who tracks the shoot Yeah, so this is a film LA.

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Speaker 6: You can you know, google them, you can find these

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Speaker 6: numbers are all available publicly, and so you if you

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Speaker 6: want to get a permit to shoot a commercial, a

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Speaker 6: TV show, whatever, you go through film LA so they

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Speaker 6: can track who's shooting, how often, you know, how many days.

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Speaker 4: And all that.

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Speaker 6: So typically, on average in a quarter prior to COVID,

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Speaker 6: it was about nine thousand, five hundred days. Obviously COVID

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Speaker 6: nothing happened, it went to zero, but by the middle

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Speaker 6: of twenty twenty one we were back to about ten

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Speaker 6: thousand days of shooting. Since the end of twenty twenty one,

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Speaker 6: so this is about the last five quarters before the

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Speaker 6: strike began. Shoot days of fall in every single quarter.

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Speaker 6: As of Q one of this year, shoot days were

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Speaker 6: twenty percent below the five year average from twenty fifteen

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Speaker 6: to twenty nineteen. So you know, even before the actress

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Speaker 6: strike started in July and the writer strikes started in May,

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Speaker 6: activity had been sort of on a pretty steady down

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Speaker 6: trend for almost you know, just over a year really,

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Speaker 6: So there you can see that, you know, things were

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Speaker 6: already kind of difficult for the industry as a whole

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Speaker 6: for the strikes again, and so that's one area we

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Speaker 6: can see it clearly. You can see the employment numbers

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Speaker 6: as well. But interestingly, you know, as we've talked about,

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Speaker 6: because writers can work other jobs, you don't see it,

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Speaker 6: for example, in the jobless claims data, you haven't seen

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Speaker 6: such a big spike overall.

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Speaker 5: You don't see the unemployment rate in California moving.

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Speaker 6: So in April it was four and a half percent,

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Speaker 6: now it's four point six percent. The one thing I

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Speaker 6: would caution is we only have data for California through

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Speaker 6: the month of August, so it's only been about a

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Speaker 6: month since, you know, the actors strikes started, so it

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Speaker 6: might just be a matter of time before we start

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Speaker 6: to see it over the next couple of months. But

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Speaker 6: on the right, on the actor's side, it might just

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Speaker 6: be a little too early to really.

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Speaker 3: Say this was going to be my next question.

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Speaker 4: I'm getting the sense that there is a lag involved here,

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Speaker 4: partly because people do have more than one job, or

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Speaker 4: actors typically have more than one job. How do you

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Speaker 4: kind of gauge how how long that lag might take

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Speaker 4: until you start seeing more of a stark impact on

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Speaker 4: the numbers.

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Speaker 6: So I don't know exactly what that lag would be,

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Speaker 6: but I think if I wanted to try to track,

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Speaker 6: you know, when is the starting to show up, I

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Speaker 6: would be most closely watching the weekly data on unemployment claims,

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Speaker 6: especially you know, granular or divicting down into LA what's

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Speaker 6: happening in La County, partly because the workforce here in

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Speaker 6: that industry is roughly I think about three and a

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Speaker 6: half percent of all jobs in LA are either in

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Speaker 6: that industry or you know, in that independent performers. So

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Speaker 6: those two areas you want to watch, and if you

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Speaker 6: start to see it happening in LA, you know, I

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Speaker 6: think it'll be obvious with the job as claims data

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Speaker 6: when that starts to show up. It's tough to say,

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Speaker 6: because people can transition from acting into other areas, right well,

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Speaker 6: in terms of those part time jobs that we talked about.

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Speaker 4: So you mentioned earlier that you have to answer three

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Speaker 4: questions in order to be counted as unemployed. Do you

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Speaker 4: know what those questions are?

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Speaker 5: Out of curiosity, I knew this was going to come up.

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Speaker 5: I should have memorized.

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Speaker 6: So one of them is you know, do you currently

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Speaker 6: have a job? Yes, er, it would have to be no,

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Speaker 6: are you available? And looking for work would also have

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Speaker 6: to be now? And the third one I'm blanking on

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Speaker 6: right now, but I will get back to.

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Speaker 5: You on it.

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Speaker 3: Okay, two out of three is pretty good.

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Speaker 2: I want to go back to a bigger picture thing

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Speaker 2: you said, which I think is really important, which is

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Speaker 2: that historically strikes are not the catalyst for the inflationary period,

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Speaker 2: but come after them. And of course that makes sense.

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Speaker 2: People feel that they're like falling behind. People want to

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Speaker 2: like get their share, and there's this whole idea of

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Speaker 2: like you know, inflation in general is often like a

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Speaker 2: battle over a result of different competing claims on money.

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Speaker 2: Can you talk a little bit about the big picture,

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Speaker 2: like historical trends of what we see. I know that

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Speaker 2: like strike activity is picked up a little bit, but

402
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Speaker 2: it's nothing like what it used to be. Like, talk

403
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Speaker 2: to us a little bit more about that theory of

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00:18:50,760 --> 00:18:54,960
Speaker 2: labor tension strikes as a sort of post inflation phenomenon.

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Speaker 6: Yeah, So obviously there's been a ton of attention on unions,

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Speaker 6: yeah and strikes the last year or so.

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Speaker 5: What's interesting is if you.

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Speaker 6: Actually look at the percentage of workers in the private

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Speaker 6: sector who are part of a union. In twenty twelve,

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Speaker 6: it was around six and a half percent. It's actually

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Speaker 6: down to six percent now, which is not something you

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Speaker 6: would necessarily know.

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Speaker 5: Sorry, what was the So these are people who are

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Speaker 5: in a union, employees who are in a union.

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Speaker 6: In terms of all private sector employment, so out of

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Speaker 6: everyone who's working in the private sector, only about six

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Speaker 6: and a half percent of people were part of a

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Speaker 6: union got it ten years ago, and now that that

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Speaker 6: share has gone down to six percent.

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Speaker 5: So even though they're getting a lot more attention.

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Speaker 6: That that share of folks who are in the union

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Speaker 6: has actually gone down. The number of people who are

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Speaker 6: currently on strike is about two hundred and ten thousand roughly.

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Speaker 6: That's not even as high as it was several years back.

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Speaker 6: It's nowhere near the several you know, five six seven

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Speaker 6: hundred thousand in the eighties. We could potentially, by the way,

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Speaker 6: get there. There's you know, the possibility that these seventy

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Speaker 6: five thousand healthcare workers might strike.

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Speaker 5: Obviously, the uaw IS is not completely striking.

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Speaker 6: That's one hundred and forty thousand people right now that

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Speaker 6: you know, I think only about fifteen twenty thousand of

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Speaker 6: them are on strike, So we could potentially get to

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Speaker 6: a number that's been the highest since the early eighties.

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Speaker 6: But I think part of you know, what's going on

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Speaker 6: there is one I think given what's gone on through

436
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Speaker 6: the pandemic. Obviously there have been a lot of changes

437
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Speaker 6: in the labor market in general, everything from work from home,

438
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Speaker 6: but also during that period, a lot of workers, frontline

439
00:20:29,640 --> 00:20:34,120
Speaker 6: workers especially, continue to work, and you know, companies did

440
00:20:34,200 --> 00:20:36,720
Speaker 6: extremely well in terms of profits, and so a lot

441
00:20:36,760 --> 00:20:38,600
Speaker 6: of these folks are coming back now and saying, like,

442
00:20:38,840 --> 00:20:40,639
Speaker 6: you know, we ought to be sharing in some of

443
00:20:40,680 --> 00:20:43,200
Speaker 6: that record profit growth that we've seen over the last

444
00:20:43,200 --> 00:20:45,320
Speaker 6: several years. And you can sort of see this in

445
00:20:45,400 --> 00:20:49,240
Speaker 6: terms of opinions about unions used to be much more negative.

446
00:20:50,000 --> 00:20:52,359
Speaker 6: They're enjoying, you know, some of the best support they've

447
00:20:52,359 --> 00:20:56,240
Speaker 6: had in decades from the general public, if you will.

448
00:20:57,160 --> 00:20:58,480
Speaker 5: So that's that's one part of it.

449
00:20:58,680 --> 00:21:01,120
Speaker 6: Also, I think the other element here is that when

450
00:21:01,119 --> 00:21:03,399
Speaker 6: you think about some of the industries where we're seeing

451
00:21:03,400 --> 00:21:08,440
Speaker 6: strike activity, they are undergoing, you know, transformational changes. Right

452
00:21:08,560 --> 00:21:10,920
Speaker 6: when you think about writers and actors. Yes, of course

453
00:21:10,960 --> 00:21:13,359
Speaker 6: it's about better pay and about you know, residuals, and

454
00:21:13,600 --> 00:21:17,080
Speaker 6: it's also about the use of AI and people want

455
00:21:17,119 --> 00:21:19,040
Speaker 6: to figure out how is that going to impact me

456
00:21:19,520 --> 00:21:23,320
Speaker 6: down the road in the in the auto workers strike, yes,

457
00:21:23,359 --> 00:21:26,760
Speaker 6: about better pay and pensions and benefits, also about evs,

458
00:21:27,200 --> 00:21:29,320
Speaker 6: you know, how is how are the elect change electric

459
00:21:29,359 --> 00:21:32,359
Speaker 6: vehicle is going to impact workers? So a lot of

460
00:21:32,359 --> 00:21:35,720
Speaker 6: these places are seeing transformational changes that are coming, and

461
00:21:36,359 --> 00:21:38,240
Speaker 6: you know, workers are trying to figure out how exactly

462
00:21:38,560 --> 00:21:41,160
Speaker 6: they can sort of protect themselves in that sort of environment.

463
00:21:41,480 --> 00:21:43,399
Speaker 5: So, yes, there's been a lot of activity. I think

464
00:21:43,440 --> 00:21:44,280
Speaker 5: the profit story is big.

465
00:21:44,280 --> 00:21:46,199
Speaker 6: I think obviously inflation is a huge, huge part of

466
00:21:46,200 --> 00:21:49,360
Speaker 6: that story. For a couple of years, real wages we're

467
00:21:49,400 --> 00:21:52,280
Speaker 6: declining very, very sharply. If you actually look at autoworkers,

468
00:21:52,280 --> 00:21:53,840
Speaker 6: for example, you go back to two thousand and eight,

469
00:21:53,960 --> 00:21:56,720
Speaker 6: they they took a lot of cuts to help the

470
00:21:56,720 --> 00:22:00,639
Speaker 6: industry survive after a wait, and if you look at

471
00:22:00,640 --> 00:22:03,520
Speaker 6: their real wages since then, they're still down about ten percent.

472
00:22:03,720 --> 00:22:05,920
Speaker 6: So they're asking to sort of, you know, be made

473
00:22:05,960 --> 00:22:09,280
Speaker 6: whole and then some at this point, given profits that

474
00:22:09,320 --> 00:22:10,840
Speaker 6: we've seen at the autoworkers.

475
00:22:10,960 --> 00:22:13,480
Speaker 4: Yeah, they also created that sort of tiered system for

476
00:22:13,600 --> 00:22:18,280
Speaker 4: auto workers. Okay, So some common themes running through the

477
00:22:18,280 --> 00:22:23,760
Speaker 4: Hollywood strikes and the auto workers strikes, such as you know,

478
00:22:24,240 --> 00:22:26,920
Speaker 4: obviously inflation has been picking up, real wages going down,

479
00:22:27,200 --> 00:22:30,879
Speaker 4: transformational change that is this big question mark for the

480
00:22:30,920 --> 00:22:33,560
Speaker 4: respective industries as a whole. But how much of a

481
00:22:33,680 --> 00:22:37,000
Speaker 4: read through can we get from the actor and writers'

482
00:22:37,040 --> 00:22:40,920
Speaker 4: strikes and the economic impact so far to the UAW, because,

483
00:22:40,960 --> 00:22:44,840
Speaker 4: as you point out, it feels like the situation of

484
00:22:45,000 --> 00:22:48,600
Speaker 4: someone who's making cars versus someone who's writing scripts or

485
00:22:48,880 --> 00:22:50,240
Speaker 4: is a part time actor.

486
00:22:50,560 --> 00:22:51,479
Speaker 3: It feels different.

487
00:22:51,960 --> 00:22:53,440
Speaker 6: Yeah, So look, I think you can't even get a

488
00:22:53,480 --> 00:22:55,160
Speaker 6: read through from the writer's strike to the actor's strike,

489
00:22:55,880 --> 00:22:58,199
Speaker 6: let alone to the UAW. I think what I was

490
00:22:58,200 --> 00:23:01,320
Speaker 6: say in general, the underlying theme has been so far

491
00:23:01,400 --> 00:23:05,000
Speaker 6: this year and parts of last year, you've seen some

492
00:23:05,200 --> 00:23:09,480
Speaker 6: unions even if they didn't necessarily strike win some really

493
00:23:09,520 --> 00:23:11,960
Speaker 6: big concessions, right, So think about ups and the team starves.

494
00:23:12,040 --> 00:23:14,360
Speaker 6: They threatened to strike, ended up not striking, but they

495
00:23:14,400 --> 00:23:18,320
Speaker 6: won some really big gains for their workers.

496
00:23:19,240 --> 00:23:21,640
Speaker 5: The pilots didn't strike, but.

497
00:23:22,080 --> 00:23:24,679
Speaker 6: United Delta ended up with forty percent races over the

498
00:23:24,680 --> 00:23:27,919
Speaker 6: next four years. So you've seen these unions sort of

499
00:23:28,000 --> 00:23:30,200
Speaker 6: rack up win after a win after win.

500
00:23:30,359 --> 00:23:31,800
Speaker 5: Really big unions rack up these wins.

501
00:23:32,000 --> 00:23:34,560
Speaker 6: The Writers is one element where you know, five months

502
00:23:34,640 --> 00:23:36,640
Speaker 6: ago people were wondering what could they actually get out

503
00:23:36,680 --> 00:23:38,800
Speaker 6: of this, and they got a fair bit of what

504
00:23:38,840 --> 00:23:39,800
Speaker 6: they wanted.

505
00:23:39,480 --> 00:23:39,920
Speaker 5: Out of it.

506
00:23:40,119 --> 00:23:42,239
Speaker 6: But it's tough because now you know, as you know

507
00:23:42,280 --> 00:23:46,080
Speaker 6: from yesterday, the negotiations are off right now on the

508
00:23:46,119 --> 00:23:48,119
Speaker 6: actor side of things, so it's tough to get a

509
00:23:48,200 --> 00:23:50,600
Speaker 6: real read through, even within the same industry. But I

510
00:23:50,640 --> 00:23:54,520
Speaker 6: would say so far, I think union after unions inspiring

511
00:23:54,520 --> 00:23:56,560
Speaker 6: the next union to take on the challenge because they

512
00:23:56,600 --> 00:23:59,600
Speaker 6: have racked up a lot of wins this year. UAW

513
00:23:59,760 --> 00:24:01,800
Speaker 6: is also so a little bit different in the sense

514
00:24:01,800 --> 00:24:05,119
Speaker 6: that the way their striking is targeted, right, So it's

515
00:24:05,160 --> 00:24:07,800
Speaker 6: a very different approach than what the Writers did, a

516
00:24:07,920 --> 00:24:09,920
Speaker 6: different approach and what the actors are doing as well.

517
00:24:10,480 --> 00:24:12,880
Speaker 6: So it's hard to say if we can really take

518
00:24:12,920 --> 00:24:14,639
Speaker 6: what happened with the writers and the resolution on the

519
00:24:14,640 --> 00:24:18,040
Speaker 6: writer's tride and say that there's something there to to

520
00:24:18,119 --> 00:24:22,240
Speaker 6: learn respect to the UAW other than hey, these guys

521
00:24:22,280 --> 00:24:24,960
Speaker 6: also got to win, you know, we should keep continue

522
00:24:24,960 --> 00:24:26,040
Speaker 6: to kind of kind of fight.

523
00:24:26,560 --> 00:24:30,320
Speaker 2: So there's an audience question. You know, you mentioned that

524
00:24:30,480 --> 00:24:34,080
Speaker 2: even prior to the strike that the number of shoot

525
00:24:34,119 --> 00:24:36,440
Speaker 2: days in the area had been trending down. I think

526
00:24:36,480 --> 00:24:39,240
Speaker 2: you said for five straight quarters. How is significant? Just

527
00:24:39,320 --> 00:24:42,400
Speaker 2: is like the health of the entertainment industry for California.

528
00:24:43,119 --> 00:24:45,600
Speaker 6: Well, if you look at shoot days, it's not going great, right,

529
00:24:45,840 --> 00:24:48,720
Speaker 6: you know, those being down twenty percent versus what we

530
00:24:48,760 --> 00:24:51,520
Speaker 6: were doing in you know, five years prior to COVID

531
00:24:51,840 --> 00:24:53,520
Speaker 6: is a pretty significant And by the way, that that

532
00:24:53,600 --> 00:24:55,840
Speaker 6: does not include the second quarter, which is when the

533
00:24:55,840 --> 00:24:56,680
Speaker 6: writer's strike began.

534
00:24:57,080 --> 00:24:58,800
Speaker 5: After that it's going to plunge. Yeah, it's gonna plunge.

535
00:24:58,840 --> 00:25:00,640
Speaker 6: And we don't even have the data yet for after

536
00:25:00,680 --> 00:25:03,280
Speaker 6: the after actor strike, right, that's going to essential plumbent.

537
00:25:03,359 --> 00:25:06,080
Speaker 5: But even by the second quarter, after the writer's strike.

538
00:25:05,880 --> 00:25:08,080
Speaker 6: Began in May, so you only really had one month

539
00:25:08,119 --> 00:25:10,840
Speaker 6: April where you probably were shooting, we were down about

540
00:25:10,840 --> 00:25:12,880
Speaker 6: six thousy five hundred days, which is the lowest since

541
00:25:13,000 --> 00:25:15,600
Speaker 6: prior to twenty fifteen. So you're, you know, you're seeing

542
00:25:15,600 --> 00:25:18,320
Speaker 6: in general a year and a half of an industry

543
00:25:18,320 --> 00:25:21,159
Speaker 6: that's been struggling. And I know, you know, throughout the

544
00:25:21,240 --> 00:25:25,000
Speaker 6: day people have talked about streaming and how the challenge

545
00:25:25,040 --> 00:25:27,600
Speaker 6: is there. So you know, I would say that the

546
00:25:27,800 --> 00:25:30,720
Speaker 6: industry has been especially think about showo days also, it's

547
00:25:30,760 --> 00:25:34,800
Speaker 6: they've been losing shoe days, especially in commercials. Think about

548
00:25:34,800 --> 00:25:37,440
Speaker 6: commercials for anything from like shooting you know, a car

549
00:25:37,480 --> 00:25:41,600
Speaker 6: commercial or so on. They're losing business to places like Georgia.

550
00:25:42,520 --> 00:25:45,000
Speaker 6: You know, Georgia's got something like about a billion dollars

551
00:25:45,000 --> 00:25:48,160
Speaker 6: in tax credit that they gave out last year, and

552
00:25:48,200 --> 00:25:52,119
Speaker 6: so that's you know, they're losing commercials to other parts

553
00:25:52,160 --> 00:25:55,960
Speaker 6: of the country. Shows are also being shot elsewhere. So

554
00:25:56,800 --> 00:25:58,960
Speaker 6: there's been a steady sort of I don't want to

555
00:25:59,000 --> 00:26:02,160
Speaker 6: say exodus, but you know folks who are erosion. Yeah,

556
00:26:02,200 --> 00:26:04,320
Speaker 6: erosions a better way to put it. So you know,

557
00:26:04,359 --> 00:26:07,520
Speaker 6: it's there's definitely a struggle going on right now. I think,

558
00:26:07,680 --> 00:26:09,280
Speaker 6: more broadly speaking for the industry.

559
00:26:10,440 --> 00:26:13,159
Speaker 4: You know, you mentioned this idea of maybe some of

560
00:26:13,200 --> 00:26:16,600
Speaker 4: the hot union summer that we've seen is being caused

561
00:26:16,600 --> 00:26:21,360
Speaker 4: by people looking at the winds from other labor organizations

562
00:26:21,560 --> 00:26:24,160
Speaker 4: and thinking like, well, you know, maybe now is our chance.

563
00:26:24,200 --> 00:26:26,919
Speaker 4: And of course you also mentioned that a lot of

564
00:26:26,960 --> 00:26:30,200
Speaker 4: strike activity tends to follow on after periods of high

565
00:26:30,200 --> 00:26:34,040
Speaker 4: inflation for obvious reasons. What would be the catalyst for

566
00:26:34,560 --> 00:26:38,399
Speaker 4: some of these wage pressures to die down? I guess

567
00:26:38,480 --> 00:26:41,640
Speaker 4: like if we started to see a lot of pushback,

568
00:26:41,880 --> 00:26:45,399
Speaker 4: if inflation started to come down and maybe real wages stabilized,

569
00:26:45,400 --> 00:26:47,800
Speaker 4: would you expect to see some of this activity go

570
00:26:47,880 --> 00:26:50,800
Speaker 4: away or what does history tell us about like the

571
00:26:51,040 --> 00:26:54,439
Speaker 4: end of these surges in strike activity.

572
00:26:54,720 --> 00:26:57,920
Speaker 6: Yeah, I don't know that inflation coming down would necessarily

573
00:26:58,680 --> 00:27:00,920
Speaker 6: solve the problem, partly because a lot of these contracts,

574
00:27:00,920 --> 00:27:03,399
Speaker 6: for example, tend to be three four years long, and

575
00:27:03,440 --> 00:27:05,919
Speaker 6: so what you're negotiating for now is to try to

576
00:27:05,960 --> 00:27:08,400
Speaker 6: get back what you've lost over the last three years.

577
00:27:08,520 --> 00:27:10,439
Speaker 6: So inflation comes down from nine percent last year to

578
00:27:10,520 --> 00:27:14,240
Speaker 6: three percent this year, that's great for hopefully locking in

579
00:27:14,359 --> 00:27:17,000
Speaker 6: a win now over the next course of the next

580
00:27:17,040 --> 00:27:19,439
Speaker 6: several years, But you're still trying to play catch up

581
00:27:19,960 --> 00:27:21,440
Speaker 6: to the last few years. So I don't know that

582
00:27:21,440 --> 00:27:24,639
Speaker 6: that would necessarily do it. I think, you know, the

583
00:27:24,760 --> 00:27:28,560
Speaker 6: two things typically tend to be one if it's if

584
00:27:28,560 --> 00:27:32,160
Speaker 6: it's an industry where public opinion will turn against.

585
00:27:31,800 --> 00:27:33,040
Speaker 5: You very quickly.

586
00:27:33,119 --> 00:27:35,720
Speaker 6: So I could see a situation, for example, if the

587
00:27:35,720 --> 00:27:38,840
Speaker 6: auto stuff drags on for a long time, the inevitable

588
00:27:38,840 --> 00:27:40,880
Speaker 6: thing that's going to happen as car prices will skyrocket

589
00:27:41,119 --> 00:27:42,800
Speaker 6: much more so than they have even in the last

590
00:27:43,320 --> 00:27:46,960
Speaker 6: year or two years, and that's going to cost I

591
00:27:47,080 --> 00:27:49,520
Speaker 6: would suspect, you know, that's going to cause problems and

592
00:27:49,560 --> 00:27:51,240
Speaker 6: tensions with the broader public.

593
00:27:51,680 --> 00:27:53,879
Speaker 5: Right, So I think that's one potential day. This is

594
00:27:54,119 --> 00:27:54,600
Speaker 5: another word.

595
00:27:54,760 --> 00:27:57,760
Speaker 2: As you said earlier, we're in an era where surveys

596
00:27:57,800 --> 00:28:01,600
Speaker 2: showed that unions enjoy relatively higher so versus say several

597
00:28:01,680 --> 00:28:05,320
Speaker 2: years ago, and if car prices start to spike, that

598
00:28:05,359 --> 00:28:06,280
Speaker 2: could start to shift.

599
00:28:06,320 --> 00:28:08,480
Speaker 6: You know, it's all well and good when the enemy

600
00:28:08,560 --> 00:28:11,000
Speaker 6: is like corporate greed, yes, right, when it starts to

601
00:28:11,040 --> 00:28:13,520
Speaker 6: hit you at home, that becomes a different story. And

602
00:28:13,560 --> 00:28:16,360
Speaker 6: people tend to change their tune pretty quickly. So that's

603
00:28:16,440 --> 00:28:19,919
Speaker 6: one potential danger there is it's sort of the public

604
00:28:19,920 --> 00:28:22,280
Speaker 6: turns against you. But the other issue also would be,

605
00:28:22,800 --> 00:28:25,520
Speaker 6: you know, to some extent, there's a certain as you know,

606
00:28:25,600 --> 00:28:28,320
Speaker 6: all these unions have a certain amount of money where

607
00:28:28,320 --> 00:28:31,639
Speaker 6: they help to provide for people who are striking. So

608
00:28:31,680 --> 00:28:34,160
Speaker 6: the UAW for example, is giving out you know, five

609
00:28:34,240 --> 00:28:36,840
Speaker 6: hundred dollars a week. At some point, you know, to

610
00:28:36,880 --> 00:28:39,800
Speaker 6: the extent those funds run dry and it really starts

611
00:28:39,840 --> 00:28:43,240
Speaker 6: to become very painful for the.

612
00:28:43,200 --> 00:28:44,160
Speaker 5: Workers at some point.

613
00:28:44,960 --> 00:28:47,840
Speaker 6: That's another sort of element that could you know, lead

614
00:28:47,920 --> 00:28:49,720
Speaker 6: to a quicker resolution, if you will.

615
00:28:50,120 --> 00:28:55,360
Speaker 2: This seems like a distinct difference between the Hollywood strikes

616
00:28:55,400 --> 00:28:58,240
Speaker 2: and the writer's strikes, where I can't imagine the auto

617
00:28:58,240 --> 00:29:01,520
Speaker 2: workers are just like picking up shifts at restaurants in

618
00:29:01,600 --> 00:29:04,160
Speaker 2: bars at the same wages they are the same way

619
00:29:04,800 --> 00:29:05,760
Speaker 2: actors often can.

620
00:29:06,200 --> 00:29:08,760
Speaker 6: Yeah, I think it's a very different dynamic. It's so

621
00:29:09,040 --> 00:29:11,280
Speaker 6: another reason it's hard to get read through between yeah

622
00:29:11,600 --> 00:29:14,840
Speaker 6: them yeah, actors. Like I said, it just hasn't shown

623
00:29:14,880 --> 00:29:17,080
Speaker 6: up in the claims data because they're able to shift

624
00:29:17,120 --> 00:29:18,280
Speaker 6: into these other sectors.

625
00:29:18,560 --> 00:29:20,720
Speaker 2: You know, there's a question and I don't know, I

626
00:29:20,760 --> 00:29:23,480
Speaker 2: wish I even knew that someone is asking other areas

627
00:29:23,520 --> 00:29:26,800
Speaker 2: within entertainment that could strike. Do you know, like, are

628
00:29:26,840 --> 00:29:30,920
Speaker 2: the other other risks of further contagion, Like I'm not

629
00:29:30,960 --> 00:29:33,000
Speaker 2: I wish I had a better understanding of whether they're

630
00:29:33,040 --> 00:29:37,160
Speaker 2: like other union guild contracts up, but is there still

631
00:29:37,440 --> 00:29:39,920
Speaker 2: risk of contagion within the local economy.

632
00:29:40,360 --> 00:29:42,959
Speaker 6: So prior to all of this, there was a it's

633
00:29:42,960 --> 00:29:44,680
Speaker 6: a resolve because I never went on strike, but there

634
00:29:44,680 --> 00:29:47,680
Speaker 6: was a director's guild right issue, but that was resolved.

635
00:29:48,080 --> 00:29:50,920
Speaker 5: The one that I have read about more recently is

636
00:29:51,080 --> 00:29:51,800
Speaker 5: voice actors.

637
00:29:52,160 --> 00:29:54,440
Speaker 6: Oh so voice actors, I mean they are are a

638
00:29:54,520 --> 00:29:58,000
Speaker 6: part of zag aster, so they they can't work, for example,

639
00:29:58,080 --> 00:30:02,080
Speaker 6: on a full length you know, animation feature, but they

640
00:30:02,160 --> 00:30:07,000
Speaker 6: can still work on voiceovers for commercials and things like that.

641
00:30:07,520 --> 00:30:09,960
Speaker 6: But there was some talk about, you know, some others

642
00:30:09,960 --> 00:30:13,760
Speaker 6: who are not covered under these contracts to potentially also

643
00:30:13,800 --> 00:30:16,200
Speaker 6: strike something similar with in terms of like the video

644
00:30:16,240 --> 00:30:19,440
Speaker 6: game industry as well. So there's some elements there, you know,

645
00:30:19,520 --> 00:30:22,240
Speaker 6: some spillover, but I don't think those areas.

646
00:30:21,960 --> 00:30:22,840
Speaker 5: Are quite as large.

647
00:30:22,880 --> 00:30:39,120
Speaker 8: So we're talking about with respect to the captures.

648
00:30:25,520 --> 00:30:25,800
Speaker 5: Part of.

649
00:30:41,600 --> 00:30:44,720
Speaker 4: This is slightly off topic perhaps but not really.

650
00:30:45,840 --> 00:30:45,920
Speaker 5: So.

651
00:30:46,120 --> 00:30:49,040
Speaker 3: The other event that happened last night.

652
00:30:49,200 --> 00:30:53,080
Speaker 4: Obviously, the second tier event compared to the opening evening

653
00:30:53,200 --> 00:30:57,840
Speaker 4: of Bloomberg screen time was Taylor Swift and her red

654
00:30:57,880 --> 00:31:01,280
Speaker 4: carpet premiere for the Eras tour. And there's been so

655
00:31:01,480 --> 00:31:05,280
Speaker 4: much discussion recently about this idea that Taylor Swift is

656
00:31:05,520 --> 00:31:09,800
Speaker 4: propping up the US economy, injecting billions of dollars worth

657
00:31:09,800 --> 00:31:12,600
Speaker 4: of demand at a time when we might otherwise see

658
00:31:12,600 --> 00:31:13,360
Speaker 4: some softening.

659
00:31:13,960 --> 00:31:14,800
Speaker 3: What do you think about the.

660
00:31:15,280 --> 00:31:19,960
Speaker 4: Swift effect THEE.

661
00:31:18,440 --> 00:31:21,160
Speaker 6: Yeah, I mean, I think it's pretty real when you

662
00:31:21,160 --> 00:31:23,560
Speaker 6: look at the data. If you look, for example, where

663
00:31:24,000 --> 00:31:26,880
Speaker 6: she has gone on tour at certain points, you will

664
00:31:26,920 --> 00:31:29,840
Speaker 6: see a spike in hotel rates everywhere she goes. So

665
00:31:30,000 --> 00:31:31,920
Speaker 6: a good example of this is a couple of months

666
00:31:31,960 --> 00:31:35,000
Speaker 6: ago we saw data in she was i think in

667
00:31:35,280 --> 00:31:37,480
Speaker 6: touring the Midwest and it was like June or July,

668
00:31:37,680 --> 00:31:40,520
Speaker 6: and prices prior to that shot off fifty five percent

669
00:31:41,080 --> 00:31:42,960
Speaker 6: for hotel rates. As soon as she left the next

670
00:31:42,960 --> 00:31:44,040
Speaker 6: month they were down twenty percent.

671
00:31:44,520 --> 00:31:44,720
Speaker 5: Wow.

672
00:31:44,880 --> 00:31:48,760
Speaker 6: So you know, there's pretty clear that there's an impact happening.

673
00:31:49,120 --> 00:31:51,640
Speaker 6: People are traveling from all over for the shows and

674
00:31:51,680 --> 00:31:54,320
Speaker 6: Beyonce also, you know, right there's actually I think, you know,

675
00:31:55,160 --> 00:31:57,200
Speaker 6: an along at Bloomberg has actually written a lot about this,

676
00:31:57,280 --> 00:31:58,840
Speaker 6: and I think it's there's a lot of good interesting

677
00:31:58,920 --> 00:32:00,480
Speaker 6: data she's put out about it. But yeah, I think

678
00:32:00,480 --> 00:32:03,080
Speaker 6: it's it's it's very real. Even the Philadelphia Fed, I believe,

679
00:32:03,080 --> 00:32:06,240
Speaker 6: at one point, said she impacted the local economy in

680
00:32:06,240 --> 00:32:09,000
Speaker 6: the Beige Book. So yeah, I think it's pretty clear

681
00:32:09,040 --> 00:32:10,680
Speaker 6: that there's a tailor effect happening.

682
00:32:10,920 --> 00:32:13,720
Speaker 4: Is it at the level where you, as an inflation

683
00:32:13,960 --> 00:32:17,320
Speaker 4: analyst have to pay attention to Taylor swift tour dates?

684
00:32:17,480 --> 00:32:20,640
Speaker 6: I never thought I would have to, but yes, because,

685
00:32:20,680 --> 00:32:23,440
Speaker 6: like I said, this hotel raids stuff was shocking, because

686
00:32:24,360 --> 00:32:27,080
Speaker 6: this is one of those things within the inflation index

687
00:32:27,160 --> 00:32:30,720
Speaker 6: that is extremely volatile, so month to month it can

688
00:32:30,800 --> 00:32:33,880
Speaker 6: destroy your forecast, and it destroyed mine this morning. But

689
00:32:34,560 --> 00:32:37,160
Speaker 6: it can move around five percent seven percent in a month.

690
00:32:37,640 --> 00:32:40,400
Speaker 6: And like I said, you know, last month it was

691
00:32:40,440 --> 00:32:42,600
Speaker 6: down massively and I couldn't figure out why, and I

692
00:32:42,600 --> 00:32:44,960
Speaker 6: started digging into the weeds, and next thing I know,

693
00:32:45,000 --> 00:32:48,120
Speaker 6: I see this massive decline in the Midwest. And sure enough,

694
00:32:48,120 --> 00:32:49,760
Speaker 6: a few months prior to that, when she was touring

695
00:32:49,760 --> 00:32:52,480
Speaker 6: around the region, you had just seen this huge search

696
00:32:52,560 --> 00:32:54,320
Speaker 6: as soon as she was gone, you saw hotel rates

697
00:32:54,360 --> 00:32:57,480
Speaker 6: come down, so there's some element of you know, her

698
00:32:57,560 --> 00:33:01,280
Speaker 6: impact on different data sets includes being the inflation index

699
00:33:01,800 --> 00:33:04,640
Speaker 6: for hotel rates that I think is pretty obvious. And again,

700
00:33:04,680 --> 00:33:06,000
Speaker 6: I never thought I would have to worry about this

701
00:33:06,080 --> 00:33:08,320
Speaker 6: kind of stuff, but it's it's in the data, so

702
00:33:08,360 --> 00:33:10,120
Speaker 6: you know, you've got to kind of be aware of

703
00:33:10,160 --> 00:33:10,840
Speaker 6: it well.

704
00:33:11,280 --> 00:33:14,120
Speaker 2: As you mentioned, so we are what is today October twelfth,

705
00:33:14,160 --> 00:33:17,320
Speaker 2: I think that's regardless. It's a is CPI Day, which

706
00:33:17,360 --> 00:33:19,240
Speaker 2: is like a holiday for you, and so we really

707
00:33:19,320 --> 00:33:23,360
Speaker 2: appreciate you spending your CPI Day with us talking about

708
00:33:23,400 --> 00:33:26,920
Speaker 2: the entertainment industry. But since we have you on CPI

709
00:33:27,000 --> 00:33:30,560
Speaker 2: Day and the numbers came in a little bit hot,

710
00:33:30,760 --> 00:33:33,720
Speaker 2: but like, what's you at least on the headline? Others

711
00:33:33,720 --> 00:33:35,560
Speaker 2: were saying, Oh, if you look at the course services

712
00:33:35,760 --> 00:33:37,280
Speaker 2: X housing is actually kind of cool.

713
00:33:37,480 --> 00:33:38,240
Speaker 5: What should we.

714
00:33:38,160 --> 00:33:40,360
Speaker 2: Take from the inflation trajectory right now?

715
00:33:40,840 --> 00:33:44,280
Speaker 6: We've had the summer of disinflation, right we had four

716
00:33:44,360 --> 00:33:47,080
Speaker 6: or five months where the numbers were retreating and they

717
00:33:47,080 --> 00:33:49,040
Speaker 6: would look like they used to look prior to COVID,

718
00:33:49,840 --> 00:33:53,840
Speaker 6: and things were improving to the point where fed officials

719
00:33:53,840 --> 00:33:55,960
Speaker 6: were saying, hey, maybe we don't need to raise rates

720
00:33:55,960 --> 00:33:59,200
Speaker 6: as much anymore. The last two months we've had this

721
00:33:59,240 --> 00:34:02,240
Speaker 6: a little bit of a pop here to slightly higher numbers.

722
00:34:02,680 --> 00:34:04,360
Speaker 6: You know, we're not going back to those twenty twenty

723
00:34:04,360 --> 00:34:06,440
Speaker 6: one type days, or to early twenty twenty two when

724
00:34:07,040 --> 00:34:09,200
Speaker 6: every month we were getting numbers that we're running, you know,

725
00:34:09,560 --> 00:34:12,080
Speaker 6: six to seven percent annualized, But right now we're around

726
00:34:12,080 --> 00:34:14,040
Speaker 6: three and a half percent anualized, which is still too

727
00:34:14,080 --> 00:34:17,520
Speaker 6: high for the Fed. Problem is, over the next quarter,

728
00:34:18,680 --> 00:34:20,279
Speaker 6: three and a half is about where we're going to

729
00:34:20,320 --> 00:34:22,720
Speaker 6: be sitting, I think. And so you know, the problem

730
00:34:22,760 --> 00:34:25,120
Speaker 6: is going to be that you're hoping to get down

731
00:34:25,160 --> 00:34:28,560
Speaker 6: to two percent on inflation. What looked like a trajectory

732
00:34:28,840 --> 00:34:30,720
Speaker 6: that was going to get you there over the summer

733
00:34:31,040 --> 00:34:34,160
Speaker 6: has now shifted higher. And I think we also have

734
00:34:34,160 --> 00:34:36,359
Speaker 6: to be a little bit careful here because CPI is

735
00:34:36,400 --> 00:34:39,080
Speaker 6: absolutely gonna shift higher over the next month or two.

736
00:34:39,719 --> 00:34:42,440
Speaker 6: The core PCEE deflator is obviously what the FED prefers

737
00:34:42,480 --> 00:34:45,799
Speaker 6: to watch. That looks like it will shift a little

738
00:34:45,800 --> 00:34:47,520
Speaker 6: bit higher, but probably not as much as what's going

739
00:34:47,560 --> 00:34:50,640
Speaker 6: to happen in the CPI. For some you know reasons

740
00:34:50,640 --> 00:34:52,879
Speaker 6: in terms of how they're constructed differently, So we're gonna

741
00:34:52,880 --> 00:34:55,520
Speaker 6: have to watch that one more closely. But the problem

742
00:34:55,520 --> 00:34:57,480
Speaker 6: for the FED, I think is when they meet in December.

743
00:34:57,840 --> 00:34:59,400
Speaker 6: They're going to walk into that meeting a lot of

744
00:34:59,440 --> 00:35:02,440
Speaker 6: people think we'd need to raise rates anymore they've were done.

745
00:35:02,960 --> 00:35:07,120
Speaker 6: What they're going to confront is a August, September, very

746
00:35:07,200 --> 00:35:09,960
Speaker 6: likely October and November CPI that are all running at

747
00:35:10,000 --> 00:35:13,680
Speaker 6: about a three and a half percent annualized rate. And

748
00:35:14,040 --> 00:35:16,080
Speaker 6: you know, you mentioned the super core, which is core

749
00:35:16,160 --> 00:35:19,120
Speaker 6: services outside of housing, So these are you know a

750
00:35:19,160 --> 00:35:22,439
Speaker 6: lot of different things. Hotel rates, airfares, what you pay

751
00:35:22,480 --> 00:35:24,560
Speaker 6: to go to the movies, you know, what you might

752
00:35:24,560 --> 00:35:25,680
Speaker 6: pay to go to a sporting event.

753
00:35:26,600 --> 00:35:27,959
Speaker 5: Those sorts of prices were up.

754
00:35:27,880 --> 00:35:31,240
Speaker 6: Today at a seven percent annualized rate. And the concern

755
00:35:31,280 --> 00:35:32,560
Speaker 6: I think is in December it is going to be

756
00:35:33,160 --> 00:35:36,760
Speaker 6: suddenly this path is shifted higher. So do they think

757
00:35:36,840 --> 00:35:39,279
Speaker 6: that they need to do one you know, maybe do

758
00:35:39,320 --> 00:35:41,080
Speaker 6: one more rate hike, which, by the way, twelve out

759
00:35:41,080 --> 00:35:43,600
Speaker 6: of nineteen of them thought was the right move in September.

760
00:35:45,160 --> 00:35:46,800
Speaker 6: It's going to be tough for them to I think,

761
00:35:47,280 --> 00:35:48,680
Speaker 6: you know, if you're a data dependent and the data

762
00:35:48,719 --> 00:35:51,000
Speaker 6: shifted higher, it's going to be tough to sort of

763
00:35:51,000 --> 00:35:53,759
Speaker 6: forego another hike in December. So I think that's that's

764
00:35:53,760 --> 00:35:55,080
Speaker 6: the concern for me, is you know, are they going

765
00:35:55,120 --> 00:35:57,400
Speaker 6: to be able to sort of parse through this and say, hey,

766
00:35:57,440 --> 00:35:58,840
Speaker 6: we should go one more time, or are they going

767
00:35:58,920 --> 00:36:00,080
Speaker 6: to look at it and say, we know some of

768
00:36:00,160 --> 00:36:02,400
Speaker 6: these things will cool off next year, so we can

769
00:36:02,440 --> 00:36:03,839
Speaker 6: kind of hold our fire right now.

770
00:36:04,160 --> 00:36:06,600
Speaker 4: Maybe they need to ask Taylor Swift if she's going

771
00:36:06,600 --> 00:36:07,680
Speaker 4: to extend her tour or not.

772
00:36:08,120 --> 00:36:11,200
Speaker 2: See, I always thought Taylor Swift tour would be deflationary

773
00:36:11,239 --> 00:36:13,720
Speaker 2: because it's all these sort of like you know, people

774
00:36:13,719 --> 00:36:16,319
Speaker 2: with like you know, middle class families transferring money to

775
00:36:16,400 --> 00:36:18,640
Speaker 2: someone who has more money than God, who is not going.

776
00:36:18,600 --> 00:36:19,839
Speaker 3: To spend it's not spending it.

777
00:36:19,800 --> 00:36:23,120
Speaker 2: All transfer of money to someone with a much lower

778
00:36:23,160 --> 00:36:27,799
Speaker 2: marginal propensity to consume. But uh again everyone but apparently in.

779
00:36:27,719 --> 00:36:30,279
Speaker 6: The short spending it on airfares into the show, to

780
00:36:30,360 --> 00:36:31,520
Speaker 6: the cab and right now.

781
00:36:32,120 --> 00:36:34,759
Speaker 4: Everything except the ticket purchase, I guess would be in Yeah.

782
00:36:34,880 --> 00:36:36,000
Speaker 6: And I was say one of the things about the

783
00:36:36,040 --> 00:36:37,239
Speaker 6: strike too, By the way, there's going to be a

784
00:36:37,280 --> 00:36:38,919
Speaker 6: lot of numbers that come out. You know, a recent

785
00:36:38,960 --> 00:36:40,799
Speaker 6: one from the Milk Institute said the economy is going

786
00:36:40,840 --> 00:36:43,280
Speaker 6: to take a five billion dollar hit from the actors

787
00:36:43,280 --> 00:36:44,920
Speaker 6: and the writer's strike. They also said there was a

788
00:36:44,920 --> 00:36:47,080
Speaker 6: two billion dollars hit in oh seven oh eight. The thing, though,

789
00:36:47,120 --> 00:36:48,279
Speaker 6: is for a lot of people, it's like, let's say

790
00:36:48,280 --> 00:36:50,360
Speaker 6: the movies don't come out, new shows are not coming out.

791
00:36:50,520 --> 00:36:52,480
Speaker 6: If you're somebody, you know, you live in wherever in

792
00:36:52,600 --> 00:36:54,879
Speaker 6: la and Manhattan, Brooklyn, and you go to the movies often,

793
00:36:54,920 --> 00:36:57,839
Speaker 6: and these movies are delayed. Now, that money can get

794
00:36:57,880 --> 00:37:01,279
Speaker 6: spent elsewhere, right, Like we know that from COVID. Right

795
00:37:01,360 --> 00:37:04,040
Speaker 6: when people couldn't people were stuck at home, they couldn't

796
00:37:04,040 --> 00:37:05,600
Speaker 6: go out to the restaurants and the bars.

797
00:37:06,120 --> 00:37:06,640
Speaker 5: What do they do.

798
00:37:06,680 --> 00:37:08,880
Speaker 6: They just bought every sofa and you know lamp they

799
00:37:08,880 --> 00:37:10,520
Speaker 6: could buy, and they remodeled.

800
00:37:10,600 --> 00:37:13,080
Speaker 5: Yeah, and they continue to do that for like two years.

801
00:37:13,280 --> 00:37:14,799
Speaker 6: So it's not you know, if you're living in New

802
00:37:14,840 --> 00:37:15,960
Speaker 6: York and you can't go see a movie because there

803
00:37:16,040 --> 00:37:17,560
Speaker 6: the movie is out, you know, you go check out

804
00:37:17,560 --> 00:37:20,319
Speaker 6: a new band at the Mercury Lounge. There's a lot

805
00:37:20,320 --> 00:37:23,520
Speaker 6: of other things to do, so that money can get

806
00:37:23,600 --> 00:37:26,800
Speaker 6: spent elsewhere and kind of limit the impact of the strike.

807
00:37:27,040 --> 00:37:28,960
Speaker 6: And in fact, if you look at, you know, sort

808
00:37:29,000 --> 00:37:30,920
Speaker 6: of some of the lost wages we've seen so far

809
00:37:31,320 --> 00:37:34,120
Speaker 6: for actors, for writers, it's a it's a problem for

810
00:37:34,160 --> 00:37:38,400
Speaker 6: the LA region. You're talking about potentially as much as

811
00:37:38,440 --> 00:37:40,680
Speaker 6: a two percent hit to GDP I think from for

812
00:37:40,840 --> 00:37:43,600
Speaker 6: annualized for LA if this goes on for the rest

813
00:37:43,600 --> 00:37:45,960
Speaker 6: of the year. But when you broaden out to California,

814
00:37:46,040 --> 00:37:47,640
Speaker 6: this is a three and a half three point seven

815
00:37:47,680 --> 00:37:50,600
Speaker 6: trillion dollar economy right now, you're talking about a couple

816
00:37:50,600 --> 00:37:52,759
Speaker 6: of maybe a tenth. You go out to the US,

817
00:37:52,800 --> 00:37:55,040
Speaker 6: it's a twenty four trillion, twenty five trillion dollars economy.

818
00:37:55,200 --> 00:37:59,360
Speaker 6: It's virtually close to zero. But like I said, you

819
00:37:59,400 --> 00:38:01,600
Speaker 6: know you, even though they are people may not be

820
00:38:01,600 --> 00:38:03,239
Speaker 6: able to spend as much on the movies and sort

821
00:38:03,239 --> 00:38:06,000
Speaker 6: of associated things that spending we know can shift elsewhere

822
00:38:06,000 --> 00:38:07,040
Speaker 6: and kind of limit that damage.

823
00:38:08,040 --> 00:38:10,040
Speaker 3: I feel like I need to spell out for all thoughts.

824
00:38:10,080 --> 00:38:11,840
Speaker 3: Listeners that go see a new.

825
00:38:11,719 --> 00:38:14,280
Speaker 4: Band at the Mercury Lounge was in fact a reference

826
00:38:14,400 --> 00:38:17,680
Speaker 4: to Joe's Band and their first show at the Mercury

827
00:38:17,719 --> 00:38:20,400
Speaker 4: Lounge in December and in terms of inflation, I just

828
00:38:20,440 --> 00:38:22,880
Speaker 4: want to add, Joe is making me buy my own tickets.

829
00:38:23,880 --> 00:38:25,920
Speaker 4: I don't even get comped the twenty bucks for.

830
00:38:25,920 --> 00:38:29,239
Speaker 2: Those we're trying to trying to do our part for

831
00:38:29,239 --> 00:38:31,520
Speaker 2: the like. If you're in New York City December nineteen,

832
00:38:31,920 --> 00:38:34,080
Speaker 2: come out to see a light sweet crew at the

833
00:38:34,120 --> 00:38:37,440
Speaker 2: Mercury Lounge. Oh Mercerief, thank you so much for doing this.

834
00:38:50,080 --> 00:38:53,880
Speaker 4: That was our conversation recorded live at the Bloomberg screen

835
00:38:53,960 --> 00:38:57,920
Speaker 4: Time Conference in La with O Mayor Sharif. I'm Tracy Alloway.

836
00:38:58,000 --> 00:39:00,280
Speaker 4: You can follow me at Tracy Alloway.

837
00:39:00,040 --> 00:39:03,040
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart,

838
00:39:03,400 --> 00:39:07,759
Speaker 2: follow Omayor at Fcast of the Month. Follow our producers

839
00:39:07,800 --> 00:39:11,680
Speaker 2: Carmen Rodriguez at Carmen Arman and Dashel Bennett at Dashbot.

840
00:39:11,680 --> 00:39:14,799
Speaker 2: And thank you to our producer Moses Ondam. From our

841
00:39:14,800 --> 00:39:17,879
Speaker 2: odd Lots content, go to Bloomberg dot com slash odd Lots,

842
00:39:17,920 --> 00:39:21,000
Speaker 2: where we have a blog, we have transcripts in a newsletter,

843
00:39:21,320 --> 00:39:23,279
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844
00:39:23,280 --> 00:39:27,560
Speaker 2: seven in our discord Discord dot gg slash odlocks.

845
00:39:27,160 --> 00:39:29,640
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846
00:39:29,680 --> 00:39:33,360
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847
00:39:33,520 --> 00:39:36,759
Speaker 4: leave us a positive review on your favorite podcast platform.

848
00:39:36,800 --> 00:39:37,560
Speaker 3: Thanks for listening.

849
00:40:05,400 --> 00:40:06,320
Speaker 4: In eight