1
00:00:02,400 --> 00:00:06,760
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,080 --> 00:00:09,840
Speaker 2: Okay, this is important. We get some piece here on

3
00:00:09,880 --> 00:00:12,440
Speaker 2: what really matters, which is the seventy percent of the

4
00:00:12,480 --> 00:00:17,200
Speaker 2: American economy, the consumer. Dana Peterson joins own chief economists

5
00:00:17,880 --> 00:00:21,960
Speaker 2: at the Conference Board and the Conference Board, I really

6
00:00:22,160 --> 00:00:25,120
Speaker 2: I can't say enough about the heritage out of one

7
00:00:25,120 --> 00:00:28,880
Speaker 2: of the really difficult times here. The Triangle shirtwais factory

8
00:00:28,880 --> 00:00:33,640
Speaker 2: fire before World War One. It's a venerable organization and

9
00:00:33,680 --> 00:00:36,840
Speaker 2: they carry that with them each and every day. Dana,

10
00:00:36,880 --> 00:00:41,400
Speaker 2: how is the Conference Board different from every other economic shop.

11
00:00:42,640 --> 00:00:45,479
Speaker 1: Well, we're different because we're non partisan. We don't have

12
00:00:45,560 --> 00:00:47,440
Speaker 1: an ax to grind. We like to give people the

13
00:00:47,479 --> 00:00:49,559
Speaker 1: facts and help them to understand it.

14
00:00:50,520 --> 00:00:53,440
Speaker 2: What do you understand now about the American consumer? The

15
00:00:54,320 --> 00:00:57,840
Speaker 2: not exuberance, but the effervescence right now is tangible. Does

16
00:00:57,880 --> 00:00:58,600
Speaker 2: it continue?

17
00:01:00,080 --> 00:01:02,880
Speaker 1: I think it does as long as consumers continue to work,

18
00:01:03,160 --> 00:01:06,679
Speaker 1: And certainly, our own consumer confidence measures signals that consumers

19
00:01:06,720 --> 00:01:09,080
Speaker 1: are saying that it's very easy to find a job

20
00:01:09,160 --> 00:01:11,440
Speaker 1: right now and they expect that to be so in

21
00:01:11,480 --> 00:01:14,480
Speaker 1: six months. So as long as consumers feel confident that

22
00:01:14,480 --> 00:01:17,240
Speaker 1: they will be working, they're happy to spend, they're spending

23
00:01:17,240 --> 00:01:19,280
Speaker 1: on good services, they're going on vacation.

24
00:01:19,520 --> 00:01:21,720
Speaker 2: So then why does it feel like too Americas the

25
00:01:21,760 --> 00:01:24,640
Speaker 2: one you just describe. And there's a lot of angst

26
00:01:24,720 --> 00:01:27,839
Speaker 2: out there from people saying it's not nearly as rosy

27
00:01:27,880 --> 00:01:29,479
Speaker 2: as what Dana Peterson says.

28
00:01:30,720 --> 00:01:33,640
Speaker 1: Well, there's the other half of that coin, and that's inflation.

29
00:01:34,520 --> 00:01:37,920
Speaker 1: While the pace of inflation has slowed significantly, prices are

30
00:01:37,959 --> 00:01:41,000
Speaker 1: still a lot higher now than they were a pre pandemic.

31
00:01:41,360 --> 00:01:44,880
Speaker 1: Inflation bites everyone, and that's what consumers are feeling. Yes,

32
00:01:44,920 --> 00:01:47,840
Speaker 1: they have higher wages, they're taking home more money, but

33
00:01:47,960 --> 00:01:50,360
Speaker 1: it's going back to the store in the form of inflation,

34
00:01:50,800 --> 00:01:53,440
Speaker 1: and I think that's what's concerning many consumers.

35
00:01:54,240 --> 00:01:56,240
Speaker 3: Yeah, that's right, Dana. I think that's kind of what

36
00:01:56,280 --> 00:01:58,320
Speaker 3: we hear from a lot of folks out there. Is

37
00:01:58,360 --> 00:02:01,760
Speaker 3: there a time when that kind of plays out, when

38
00:02:01,800 --> 00:02:05,720
Speaker 3: we stop saying, boy, my supermarket bill is a lot

39
00:02:05,760 --> 00:02:08,160
Speaker 3: higher than it used to be, Because one could argue

40
00:02:08,200 --> 00:02:11,919
Speaker 3: we're almost five years into the onset of the pandemic

41
00:02:12,040 --> 00:02:15,919
Speaker 3: and the inflation resulting therefrom Is there a point where

42
00:02:15,960 --> 00:02:17,960
Speaker 3: this becomes less of an issue for people?

43
00:02:19,280 --> 00:02:21,560
Speaker 1: I think once people get used to it. So for example,

44
00:02:21,560 --> 00:02:24,399
Speaker 1: with the housing market, you know, there's a whole generation

45
00:02:24,480 --> 00:02:27,280
Speaker 1: of folks who never owned a home and they don't

46
00:02:27,320 --> 00:02:30,080
Speaker 1: remember three percent mortgages, and they're saying, well, I guess

47
00:02:30,120 --> 00:02:33,000
Speaker 1: this is what the environment looks like. The mortgage is

48
00:02:33,000 --> 00:02:34,760
Speaker 1: going to be five six percent, but I still don't

49
00:02:34,800 --> 00:02:37,120
Speaker 1: want to buy that house, so they go for And

50
00:02:37,120 --> 00:02:39,040
Speaker 1: that's what we're seeing more of people just kind of

51
00:02:39,080 --> 00:02:41,320
Speaker 1: resigning themselves to this is the new normal.

52
00:02:42,400 --> 00:02:45,480
Speaker 3: And so, Dana, I mean, the labor market, you know,

53
00:02:45,800 --> 00:02:50,120
Speaker 3: by all measures, is still very very strong, very vibrant.

54
00:02:50,160 --> 00:02:52,640
Speaker 3: It seems like if people want a job, they can

55
00:02:52,720 --> 00:02:56,760
Speaker 3: get a job. Wagers are rising now at a faster

56
00:02:56,919 --> 00:03:02,000
Speaker 3: rate than inflation. How do you characterize the labor market

57
00:03:02,040 --> 00:03:02,520
Speaker 3: these days?

58
00:03:03,520 --> 00:03:06,919
Speaker 1: I think the labor market's super robust. We're still seeing

59
00:03:07,040 --> 00:03:11,480
Speaker 1: job gains. November was really outsized. Yes, we had a

60
00:03:11,480 --> 00:03:14,520
Speaker 1: bit of a payback from the hurricane related weakness, but

61
00:03:14,840 --> 00:03:18,280
Speaker 1: you know, again people are working. Many companies are still

62
00:03:18,360 --> 00:03:20,760
Speaker 1: hiring or they're at least holding on to their workers.

63
00:03:21,040 --> 00:03:23,680
Speaker 1: When we ask CEOs what they're planning to do, seventy

64
00:03:23,680 --> 00:03:26,640
Speaker 1: five percent say we're going to hire or basically ward

65
00:03:26,639 --> 00:03:27,640
Speaker 1: our labor force.

66
00:03:27,560 --> 00:03:31,440
Speaker 2: Frame out your real GDP twelve months out and overlay

67
00:03:31,440 --> 00:03:35,240
Speaker 2: inflation to a nominal GDP number. What does the Conference

68
00:03:35,240 --> 00:03:36,880
Speaker 2: sports see?

69
00:03:37,240 --> 00:03:40,760
Speaker 1: Well, four percent, so that'd be two percent GDP and

70
00:03:40,800 --> 00:03:44,520
Speaker 1: then two percent inflation. So we hope that happens, although

71
00:03:44,520 --> 00:03:47,160
Speaker 1: there are very many risks that could cause inflation to

72
00:03:47,200 --> 00:03:50,000
Speaker 1: be higher than we exchect and also growth to be lower.

73
00:03:50,240 --> 00:03:53,640
Speaker 2: But is that your definition of a solid economy or

74
00:03:53,640 --> 00:03:57,360
Speaker 2: I'm like, OMG, the COVID boom is over and we're

75
00:03:57,400 --> 00:03:58,080
Speaker 2: slowing down.

76
00:03:59,240 --> 00:04:01,480
Speaker 1: Well, we've already kind of slowed down to I think

77
00:04:01,480 --> 00:04:04,720
Speaker 1: what's a new normal. We'll probably get there next year

78
00:04:04,760 --> 00:04:08,240
Speaker 1: with two percent growth. That's quite strong. The key thing

79
00:04:08,360 --> 00:04:10,240
Speaker 1: is just keeping me unemployment right low.

80
00:04:10,400 --> 00:04:13,440
Speaker 2: Yeah. Is there a wealth affect Dana Peterson? I mean,

81
00:04:13,480 --> 00:04:16,400
Speaker 2: are people looking at like Sweeney's looking at his Nvidia

82
00:04:17,120 --> 00:04:19,680
Speaker 2: going You know, I can afford the sphere and the

83
00:04:19,760 --> 00:04:23,440
Speaker 2: eagles because I'm large. Is there a wealth effect out

84
00:04:23,480 --> 00:04:24,120
Speaker 2: there going on?

85
00:04:25,200 --> 00:04:25,400
Speaker 3: Well?

86
00:04:25,440 --> 00:04:28,120
Speaker 1: For those who own financial assets, yes, there is a

87
00:04:28,160 --> 00:04:30,640
Speaker 1: wealth effect. If you own a home, your home home

88
00:04:30,680 --> 00:04:34,640
Speaker 1: prices have almost doubled. If you own stocks, they continue

89
00:04:34,640 --> 00:04:38,320
Speaker 1: to rise. The bond market it's in and out, but

90
00:04:38,520 --> 00:04:41,200
Speaker 1: you know, things are I think, well for those who

91
00:04:41,240 --> 00:04:44,159
Speaker 1: have assets, but for folks who don't have assets, they're

92
00:04:44,200 --> 00:04:47,000
Speaker 1: probably not as excited, but still they may look at

93
00:04:47,120 --> 00:04:49,440
Speaker 1: the strength of the stock market as an indicator that

94
00:04:49,520 --> 00:04:52,040
Speaker 1: their job is going to be there and that they're

95
00:04:52,040 --> 00:04:52,760
Speaker 1: going to prosper.

96
00:04:52,920 --> 00:04:55,240
Speaker 2: This is dead on. I can't what you just heard,

97
00:04:55,320 --> 00:04:59,760
Speaker 2: folks from mss Peterson is so so important. We look

98
00:04:59,760 --> 00:05:01,760
Speaker 2: at like the halves and they have nots, and we

99
00:05:01,760 --> 00:05:04,760
Speaker 2: look at the paycheck, which makes sense, but there's also

100
00:05:04,800 --> 00:05:08,719
Speaker 2: the halves and the have nots with assets and that's

101
00:05:08,760 --> 00:05:12,440
Speaker 2: not nearly discussed as it should be. Dana Peterson, thank

102
00:05:12,480 --> 00:05:15,000
Speaker 2: you so much, Chief Economist at the Conference Board,