Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Okay, this is important. We get some piece here on
Speaker 2: what really matters, which is the seventy percent of the
Speaker 2: American economy, the consumer. Dana Peterson joins own chief economists
Speaker 2: at the Conference Board and the Conference Board, I really
Speaker 2: I can't say enough about the heritage out of one
Speaker 2: of the really difficult times here. The Triangle shirtwais factory
Speaker 2: fire before World War One. It's a venerable organization and
Speaker 2: they carry that with them each and every day. Dana,
Speaker 2: how is the Conference Board different from every other economic shop.
Speaker 1: Well, we're different because we're non partisan. We don't have
Speaker 1: an ax to grind. We like to give people the
Speaker 1: facts and help them to understand it.
Speaker 2: What do you understand now about the American consumer? The
Speaker 2: not exuberance, but the effervescence right now is tangible. Does
Speaker 2: it continue?
Speaker 1: I think it does as long as consumers continue to work,
Speaker 1: And certainly, our own consumer confidence measures signals that consumers
Speaker 1: are saying that it's very easy to find a job
Speaker 1: right now and they expect that to be so in
Speaker 1: six months. So as long as consumers feel confident that
Speaker 1: they will be working, they're happy to spend, they're spending
Speaker 1: on good services, they're going on vacation.
Speaker 2: So then why does it feel like too Americas the
Speaker 2: one you just describe. And there's a lot of angst
Speaker 2: out there from people saying it's not nearly as rosy
Speaker 2: as what Dana Peterson says.
Speaker 1: Well, there's the other half of that coin, and that's inflation.
Speaker 1: While the pace of inflation has slowed significantly, prices are
Speaker 1: still a lot higher now than they were a pre pandemic.
Speaker 1: Inflation bites everyone, and that's what consumers are feeling. Yes,
Speaker 1: they have higher wages, they're taking home more money, but
Speaker 1: it's going back to the store in the form of inflation,
Speaker 1: and I think that's what's concerning many consumers.
Speaker 3: Yeah, that's right, Dana. I think that's kind of what
Speaker 3: we hear from a lot of folks out there. Is
Speaker 3: there a time when that kind of plays out, when
Speaker 3: we stop saying, boy, my supermarket bill is a lot
Speaker 3: higher than it used to be, Because one could argue
Speaker 3: we're almost five years into the onset of the pandemic
Speaker 3: and the inflation resulting therefrom Is there a point where
Speaker 3: this becomes less of an issue for people?
Speaker 1: I think once people get used to it. So for example,
Speaker 1: with the housing market, you know, there's a whole generation
Speaker 1: of folks who never owned a home and they don't
Speaker 1: remember three percent mortgages, and they're saying, well, I guess
Speaker 1: this is what the environment looks like. The mortgage is
Speaker 1: going to be five six percent, but I still don't
Speaker 1: want to buy that house, so they go for And
Speaker 1: that's what we're seeing more of people just kind of
Speaker 1: resigning themselves to this is the new normal.
Speaker 3: And so, Dana, I mean, the labor market, you know,
Speaker 3: by all measures, is still very very strong, very vibrant.
Speaker 3: It seems like if people want a job, they can
Speaker 3: get a job. Wagers are rising now at a faster
Speaker 3: rate than inflation. How do you characterize the labor market
Speaker 3: these days?
Speaker 1: I think the labor market's super robust. We're still seeing
Speaker 1: job gains. November was really outsized. Yes, we had a
Speaker 1: bit of a payback from the hurricane related weakness, but
Speaker 1: you know, again people are working. Many companies are still
Speaker 1: hiring or they're at least holding on to their workers.
Speaker 1: When we ask CEOs what they're planning to do, seventy
Speaker 1: five percent say we're going to hire or basically ward
Speaker 1: our labor force.
Speaker 2: Frame out your real GDP twelve months out and overlay
Speaker 2: inflation to a nominal GDP number. What does the Conference
Speaker 2: sports see?
Speaker 1: Well, four percent, so that'd be two percent GDP and
Speaker 1: then two percent inflation. So we hope that happens, although
Speaker 1: there are very many risks that could cause inflation to
Speaker 1: be higher than we exchect and also growth to be lower.
Speaker 2: But is that your definition of a solid economy or
Speaker 2: I'm like, OMG, the COVID boom is over and we're
Speaker 2: slowing down.
Speaker 1: Well, we've already kind of slowed down to I think
Speaker 1: what's a new normal. We'll probably get there next year
Speaker 1: with two percent growth. That's quite strong. The key thing
Speaker 1: is just keeping me unemployment right low.
Speaker 2: Yeah. Is there a wealth affect Dana Peterson? I mean,
Speaker 2: are people looking at like Sweeney's looking at his Nvidia
Speaker 2: going You know, I can afford the sphere and the
Speaker 2: eagles because I'm large. Is there a wealth effect out
Speaker 2: there going on?
Speaker 3: Well?
Speaker 1: For those who own financial assets, yes, there is a
Speaker 1: wealth effect. If you own a home, your home home
Speaker 1: prices have almost doubled. If you own stocks, they continue
Speaker 1: to rise. The bond market it's in and out, but
Speaker 1: you know, things are I think, well for those who
Speaker 1: have assets, but for folks who don't have assets, they're
Speaker 1: probably not as excited, but still they may look at
Speaker 1: the strength of the stock market as an indicator that
Speaker 1: their job is going to be there and that they're
Speaker 1: going to prosper.
Speaker 2: This is dead on. I can't what you just heard,
Speaker 2: folks from mss Peterson is so so important. We look
Speaker 2: at like the halves and they have nots, and we
Speaker 2: look at the paycheck, which makes sense, but there's also
Speaker 2: the halves and the have nots with assets and that's
Speaker 2: not nearly discussed as it should be. Dana Peterson, thank
Speaker 2: you so much, Chief Economist at the Conference Board,