Speaker 1: It's hard not to notice that your grocery bill is
Speaker 1: higher month in and month out, and your utilities keep
Speaker 1: inching up, or you're paying more interest on credit card debt,
Speaker 1: You're in good company. The cost of living in the
Speaker 1: United States has increased significantly since twenty twenty, and while
Speaker 1: inflation is said to be easing, it doesn't mean the
Speaker 1: cost of goods are going back down. It just means
Speaker 1: they're increasing at a slower rate. Bloomberg's Read Picker and
Speaker 1: Jenna Hawk crunch the numbers to see just how much
Speaker 1: more Americans are shouldering in their everyday life expenses than
Speaker 1: they were before the pandemic.
Speaker 2: Compared to January twenty twenty, wages are up about twenty percent.
Speaker 2: But I think what makes people quite upset is when
Speaker 2: you adjust for inflation, that same measure shows that wages
Speaker 2: over that same period of time, instead of being up
Speaker 2: twenty percent, are up less than one percent. And so
Speaker 2: you look around and yes, your wages may have kept
Speaker 2: up in the aggregate, but some of these things that
Speaker 2: you're paying more four have risen much faster than your wages.
Speaker 3: So, say you spent one hundred dollars on goods and
Speaker 3: services in around January of twenty twenty. Now, to get
Speaker 3: all of those same goods and services, it would cost
Speaker 3: around between one hundred and nineteen to one hundred and
Speaker 3: twenty dollars, So we're talking about roughly a twenty percent increase.
Speaker 3: And I think the really tricky thing here is that
Speaker 3: it's not just small luxuries that we're talking about, Like truly,
Speaker 3: no area of a household budget has been spared.
Speaker 4: When it comes to this rise in the cost of living.
Speaker 1: Read and Jenna join me to walk through every corner
Speaker 1: of the household budget that have been affected and how
Speaker 1: it shapes consumer feelings about their own economic futures. I'm
Speaker 1: Scarlet Foo today on the big take, the cost of
Speaker 1: living is more costly than ever. So you write that
Speaker 1: after years of inflation, US consumers are now, using your words,
Speaker 1: shouldering a burden unlike anything seen in decades. So I'd
Speaker 1: like to start by you're giving us an overview of
Speaker 1: what's happening, because consumers are definitely feeling stressed, even as
Speaker 1: the official numbers show inflation is slowing down absolutely.
Speaker 2: So typically when we write or talk about inflation, we're
Speaker 2: talking about the annual rate or how much prices have
Speaker 2: risen from a year ago, and while that rate has
Speaker 2: fallen a lot since last year. When you talk to
Speaker 2: actual people, not economists or policymakers, they tend to focus
Speaker 2: on the price level, and the fact is that prices
Speaker 2: are much higher now than they were before the pandemic.
Speaker 2: So this story by Jenna and I, the purpose of
Speaker 2: it was to really put numbers to show how much
Speaker 2: those prices have increased over the last few years and
Speaker 2: really get at this idea of the cumulative burden of inflation.
Speaker 2: And in fact, prices have risen about as much in
Speaker 2: the last few years as they had it in the
Speaker 2: full decade preceding the pandemic.
Speaker 1: You know, one thing I think about is before the pandemic,
Speaker 1: there was this conventional wisdom that inflation was super low
Speaker 1: and it wasn't going to spike again. We had fixed it.
Speaker 1: It was vanquished. No one's saying that anymore, are they read.
Speaker 2: Not that I know of. I think the team transitory
Speaker 2: discussion that we saw arise at the start of this
Speaker 2: has certainly had a moment where we now realize that
Speaker 2: inflation is something that can always come back. It just
Speaker 2: depends on the moment in time.
Speaker 1: My question now is how much is COVID at fault
Speaker 1: for these increased costs or were there already some shifts,
Speaker 1: big shifts taking place across the economy that was pushing
Speaker 1: up costs. In other words, inflation was inevitable after a
Speaker 1: period of super low price increases, and this is just
Speaker 1: what we're going to see as the cycle turns.
Speaker 2: I'm not sure anything in the economy is inevitable, and
Speaker 2: I think one key example of that is the recession
Speaker 2: that's been telegraphed and talked about for over a year
Speaker 2: and a half now that has yet to materialize. Doesn't
Speaker 2: mean it won't, just hasn't shown up yet. But I
Speaker 2: think the reasons for inflation, there's quite a few, but
Speaker 2: to focus on some of the major ones. So the
Speaker 2: pandemic itself wreaked havoc on supply chains globally, making it
Speaker 2: more difficult and more expensive to not only build but
Speaker 2: also transport merchandise across the world and within the US.
Speaker 2: Two At the same time, you had this shift from
Speaker 2: spending on services, which is what the majority of Americans
Speaker 2: spend their money on, to goods, in part because people
Speaker 2: couldn't go out and spend on travel or dining out
Speaker 2: in the same way. And so at the same time
Speaker 2: that you saw this crunch on supply chains, you also
Speaker 2: saw more demand. You also saw this unprecedented government support.
Speaker 2: So when we think about out the way that the
Speaker 2: US government responded to the economic disaster that was unfolding
Speaker 2: from the pandemic, the government really stepped in both with
Speaker 2: expanded unemployment benefits as well as direct checks to households.
Speaker 2: In these stimulus checks that ended up leaving many families
Speaker 2: with thousands of more dollars in their bank accounts to
Speaker 2: help offset some of the extra burden that they were
Speaker 2: facing in the depths of the pandemic and in the
Speaker 2: early part of the recovery. But what that ended up
Speaker 2: creating was this mixture of both this rebound in the
Speaker 2: labor market that helped a lot of people go back
Speaker 2: into employment quickly, but also this rebound that forced employers
Speaker 2: to really offer big bumps in wages in order to
Speaker 2: try to fill these positions quickly, and we hurt a lot,
Speaker 2: especially at the beginning of this rebound, of employers struggling
Speaker 2: to fill these positions and ways in which they were
Speaker 2: trying to make their offers more competitive. Nation of all
Speaker 2: of this left folks with a lot of excess money,
Speaker 2: which we often talk about as excess savings, which is
Speaker 2: essentially just how much Americans have saved compared to the
Speaker 2: pre pandemic trend, and that really added to this consumption
Speaker 2: trend as well.
Speaker 1: So you bring up a good point, which is wages
Speaker 1: have increased, and they've actually increased quite a bit since
Speaker 1: twenty twenty. That should blunt the impact of inflation. Nevertheless,
Speaker 1: and I know you've written about this extensively, why do
Speaker 1: people still feel worse off than they did before the
Speaker 1: pandemic in terms of wages.
Speaker 2: We have seen historic wage gains. It's truly been amazing
Speaker 2: what we've seen, and you've seen some of the biggest
Speaker 2: of these wage gains happening at the lower end of
Speaker 2: the income scale. Compared to January twenty twenty, wages are
Speaker 2: up about twenty percent. But I think what makes people
Speaker 2: quite upset is when you adjust for inflation, that same
Speaker 2: measure shows that wages over that same period of time,
Speaker 2: instead of being up twenty percent, are up less than
Speaker 2: one percent. And so you look around and yes, your
Speaker 2: wages may have kept up in the aggregate, but some
Speaker 2: of these things that you're paying more for have risen
Speaker 2: much faster than your wages. So on a nominal basis,
Speaker 2: wages are up twenty percent, But what happens when your
Speaker 2: grocery prices are up twenty five percent? You know you
Speaker 2: feel that differently in your budget. And so it's this
Speaker 2: idea that this inflation is really eroding a lot of
Speaker 2: these historic gains that we've seen in recent years.
Speaker 1: One thing that's clear is I think you really hit
Speaker 1: it on the head when you said it's how people
Speaker 1: feel and what we experience in our day to day life.
Speaker 1: Our routines changed during the pandemic, that's clear. But for
Speaker 1: most of us things have largely returned to the pre
Speaker 1: pandemic normal as well, the cost of living has not.
Speaker 1: And Jenna, you guys crunch some numbers. Just give me
Speaker 1: some context here. Say you spent one hundred dollars on
Speaker 1: goods or services before the pandemic, how much would those
Speaker 1: same goods or services cost today?
Speaker 3: So, say you spent one hundred dollars on goods and
Speaker 3: services in around January of twenty twenty. Now to get
Speaker 3: all of those same goods and services, it would cost
Speaker 3: between one hundred and nineteen to one hundred twenty dollars,
Speaker 3: so we're talking about roughly a twenty percent increase. And
Speaker 3: I think the really tricky thing here is that it's
Speaker 3: not just small luxuries that we're talking about, Like truly,
Speaker 3: no area of a household budget has been spared when
Speaker 3: it comes to this rise in the cost of living.
Speaker 3: We're talking about basic necessities like rent, gas, electricity. It's
Speaker 3: not just those extra amenities that people think about, right, and.
Speaker 4: Food as well.
Speaker 1: The most direct way people feel inflation is through their
Speaker 1: grocery bills. What are the numbers when you look at
Speaker 1: the grocery bills that surprised you the most.
Speaker 3: So we're seeing that groceries are up around twenty five percent,
Speaker 3: and that you can sort of break that down into
Speaker 3: various items. Coffees up about two dollars a pound. We
Speaker 3: saw the egg crisis earlier in the pandemic, where eggs
Speaker 3: were almost like triple the price of their normal amount.
Speaker 3: Ground beef used to cost like three dollars in eighty
Speaker 3: nine cents in January of twenty twenty.
Speaker 4: Now it's more than five dollars.
Speaker 3: So we're talking again about these basic necessities, these basic
Speaker 3: household items that you need to feed a family, and
Speaker 3: they're up significantly higher, and just.
Speaker 2: To jump in there. I think groceries in particular is
Speaker 2: one that's interesting because while Americans have long been used
Speaker 2: to mini prices going up a little bit each year,
Speaker 2: say your rent bell, for instance, groceries are something that
Speaker 2: we're historically quite stable before the pandemic. So yeah, there
Speaker 2: might be some price spikes for specific items due to drought, disease,
Speaker 2: or natural disaster, but in aggregate, in the four years
Speaker 2: leading up to the pandemic, grocery prices rose less than
Speaker 2: one percent, So that really provided this sense of predictability
Speaker 2: that many households came to rely on that really has
Speaker 2: been erased these last couple of years.
Speaker 1: What's the forecast for next year in terms of grocery prices?
Speaker 1: Are we going to continue to see this rate of change?
Speaker 3: So the forecast that we're seeing for next year is
Speaker 3: that grocery prices are going to be cut to less
Speaker 3: than two percent growth. But again, I think it's this
Speaker 3: issue that we're seeing that it's not always about year
Speaker 3: over year change. People are still thinking about how much
Speaker 3: growth in prices and levels of prices that they've seen
Speaker 3: since the start of twenty twenty, and that's not really
Speaker 3: going away anytime soon. When people talk about inflation slowing
Speaker 3: down or cooling, it maybe gives the impression that, oh,
Speaker 3: maybe things are going to return to normal. But your
Speaker 3: January twenty twenty grocery bill is not coming back. And
Speaker 3: that's something that Americans are really grappling with right.
Speaker 1: Now after the break. How is inflation affecting people's chances
Speaker 1: of owning a home? Let's talk about housing, because that,
Speaker 1: by far is the largest expense for Americans in any
Speaker 1: given month, whether you rent or whether you own. How
Speaker 1: is inflation affecting renters versus homeowners.
Speaker 3: We're seeing that rent is up about twenty to thirty percent,
Speaker 3: depending on the source of data that you go with,
Speaker 3: but rent is extremely high right now compared to pre
Speaker 3: pandemic levels. And on the one hand, when it comes
Speaker 3: to home ownership, home values have actually skyrocketed over that
Speaker 3: same time period. We're seeing home values up around forty
Speaker 3: two percent from the start of the pandemic.
Speaker 4: Which is kind of crazy.
Speaker 3: If you were lucky and you were part of that
Speaker 3: group that was able to buy a house before the pandemic,
Speaker 3: you saw this massive gain and wealth. But if you
Speaker 3: weren't able to make that jump from renting to owning
Speaker 3: a home. You sort of lost out without really knowing
Speaker 3: that you were supposed to do this back in twenty twenty.
Speaker 1: And these are paper gains for homeowners as well, because
Speaker 1: there aren't that many transactions taking place in the housing
Speaker 1: market right now, because no one wants to give up
Speaker 1: their sub three percent mortgage at a time when mortgages
Speaker 1: cost at least seven percent.
Speaker 3: Yeah, mortgages at the end of November are up around
Speaker 3: to seven point five percent now, so it's sort of
Speaker 3: never been more expensive than it is right now to
Speaker 3: make plunged try to buy a home. So if again,
Speaker 3: if you were one of those people that got lucky
Speaker 3: and decided to buy a home before before you saw
Speaker 3: all these interest rates hikes, you saw this massive.
Speaker 4: Gain and wealth.
Speaker 3: But if you didn't, it also sort of makes it
Speaker 3: harder again for renters because the people that were going
Speaker 3: to buy a house ended up staying renting, and that
Speaker 3: just makes the rent landscape even more competitive.
Speaker 1: Buying a house is one thing, or renting a house,
Speaker 1: but then you've got the routine costs like utilities, specifically electricity.
Speaker 1: Talk about what that increase looks.
Speaker 3: Like so every part of home ownership and dealing with
Speaker 3: a home right now has gotten more expensive. Your rent
Speaker 3: is more expensive, mortgage rates are higher, and even utility
Speaker 3: bills like electricity and natural gas are up. We see
Speaker 3: that electricity is up around twenty five percent compared to
Speaker 3: twenty nineteen or pre pandemic levels, and natural gas is
Speaker 3: up twenty nine percent.
Speaker 1: And one thing that you've noted is that the electricity
Speaker 1: cost increase has been fairly uneven across the United States.
Speaker 1: What states are seeing the biggest increases, What states are
Speaker 1: seeing fairly minimal increases.
Speaker 3: Electricity bills are rising the fastest in areas like California
Speaker 3: and Maine. In California, bills are up around fifty one
Speaker 3: percent from the most recent data that we have from
Speaker 3: the US Energy Information Administration. And you'll see sort of
Speaker 3: normal price growth in areas like the Midwest, where they're
Speaker 3: only seeing around like two to ten percent increase in
Speaker 3: their bills, but main is also a really high one.
Speaker 3: You've seen bills increase by forty two percent. Some of
Speaker 3: that change or unevenness in the growth is sort of
Speaker 3: due to where these power sources are being pulled from
Speaker 3: California has historically always been one of the most expensive
Speaker 3: states for utilities, and that has to do with various
Speaker 3: cost structures and fixed costs that aren't associated with actually
Speaker 3: how much energy that you're pulling. And another thing is seasonality.
Speaker 3: As we deal with climate change and summers get hotter,
Speaker 3: you're running your AC units more in the winter. If
Speaker 3: it's colder, you're going to keep the keet up. So
Speaker 3: these external factors are also playing a real role in
Speaker 3: these rising costs.
Speaker 1: Yeah, extreme weather in either direction just means more powers
Speaker 1: consumed to make it a comfortable environment. Other essential bills,
Speaker 1: like the premiums on car insurance and health insurance have
Speaker 1: also gone up. Give us an overview on what's happening
Speaker 1: here because it goes pretty deep.
Speaker 4: So car insurance is up quite a bit.
Speaker 3: We see it's up around thirty three percent, and that's
Speaker 3: pretty out of line with historical baselines that we've seen.
Speaker 3: From twenty sixteen to twenty nineteen, we only saw a
Speaker 3: growth of about twenty percent, and part of this is
Speaker 3: also due to the cost that it takes to now
Speaker 3: replace parts of these cars. We have faced a real
Speaker 3: supply chain issue in the last couple of years when
Speaker 3: it comes to the shortage of chips or semiconductors. So
Speaker 3: all of these have these downstream effects that are hitting
Speaker 3: the consumer harder.
Speaker 1: I also think that the labor shortage has a lot
Speaker 1: to do with it, because it's hard to find technicians
Speaker 1: in auto repair shops or in hospitals, and that increases
Speaker 1: the costs for the hospitals or the body shops that
Speaker 1: employ them, and of course then the end user, the consumer,
Speaker 1: ends up paying for that too.
Speaker 3: Definitely, there's certainly compounding effects that all again trickle down
Speaker 3: to higher costs for the consumer.
Speaker 1: You also write that borrowing costs have become a lot
Speaker 1: more expensive. We know the Federal Reserve has raised interest
Speaker 1: rates a number of times at the most aggressive pace
Speaker 1: in a generation, but that is leading to higher rates
Speaker 1: for things like card loans and.
Speaker 4: Credit cards as well.
Speaker 1: Talk about the cumulative effect of all these higher interest
Speaker 1: rates and what it means for household budgets.
Speaker 4: Yeah, again, it's this cyclical nature, right.
Speaker 3: Your everyday expenses have gone up a ton, your wages
Speaker 3: haven't kept pace.
Speaker 4: You don't know if you'll.
Speaker 3: Always be able to pay off your credit card balance,
Speaker 3: and if you don't make that payment on time, interest
Speaker 3: rates and borrowing on that line of credit has never
Speaker 3: been more expensive than it is now. It's this repeat
Speaker 3: cycle of things getting harder and harder, and it's just
Speaker 3: really affecting the consumer in a way that we've never
Speaker 3: really seen before.
Speaker 1: Yeah, if you have to service debt, if you have
Speaker 1: credit card debt, at one point the rates were high,
Speaker 1: you knew you were paying for it, but at the
Speaker 1: current rates, it's something that takes a bigger percentage of
Speaker 1: your budget and it just becomes extremely painful to have
Speaker 1: to service that debt at a time when your wages
Speaker 1: aren't covering the higher expenses for everything else.
Speaker 2: And I think you're starting to see how those higher
Speaker 2: interest rates are impacting Americans so at the same time
Speaker 2: that you know they're facing the higher costs of virtually everything,
Speaker 2: and servicing those debts has gotten more expensive because of
Speaker 2: higher interest rates, as well as the fact that there's
Speaker 2: the resumption of student loan debt and some of these
Speaker 2: other factors that are coming into play as well. You've
Speaker 2: started to see delinquency rates really start to climb again.
Speaker 2: And when thinking about what happened during the pandemic, delinquency
Speaker 2: rates really went down a lot because people suddenly had
Speaker 2: money to be able to pay down these debts, and
Speaker 2: some folks had savings cushions for the first time in
Speaker 2: their lives or at least in the kind of recent asked.
Speaker 2: And you're starting to kind of see this return to trend.
Speaker 2: And it's not quite clear whether the increase that we're
Speaker 2: seeing is something that's more of a return to normal
Speaker 2: or the start of something that's a lot more concerning
Speaker 2: in terms of where things are heading, But there's certainly
Speaker 2: some indications that there are reasons for concern. One thing
Speaker 2: that really stuck out to me because my colleague Alex
Speaker 2: Tanzy wrote a really smart story talking about how folks
Speaker 2: are increasingly tapping their retirement savings to cover their bills.
Speaker 2: So last quarter we saw more workers take what's known
Speaker 2: as a hardship withdrawal, and the top two reasons for
Speaker 2: this uptick of people tapping these savings was to avoid
Speaker 2: foreclosure or eviction and for medical expenses. So these things
Speaker 2: are really starting to weigh on folks, and it will
Speaker 2: be interesting to see kind of where we go from.
Speaker 1: Here coming up. Could the state of our household budgets
Speaker 1: play a role in determining the twenty twenty four election.
Speaker 1: You mentioned how there was this cushion that government stimulus
Speaker 1: and of course are not being able to go out
Speaker 1: allow people to build.
Speaker 4: Up during the pandemic.
Speaker 1: What do American savings look like right now in late
Speaker 1: twenty twenty three.
Speaker 2: So the latest data that we have from the Federal
Speaker 2: Reserve is up to the middle of twenty twenty three,
Speaker 2: so that's kind of our latest snapshot and on a
Speaker 2: nominal basis, so not adjusting for inflation, we saw that
Speaker 2: aggregate savings are still up compared to where they were
Speaker 2: in the first quarter of twenty twenty. But I think
Speaker 2: something that's important to keep in mind, especially when we
Speaker 2: talk about savings, is what happens when you inflation adjust them,
Speaker 2: as well as who is holding these savings. So while
Speaker 2: it was really stunning, an amazing and a true silver
Speaker 2: lining to see that folks across the income ladder were
Speaker 2: able to save more during the pandemic, roughly two thirds
Speaker 2: of the total deposits as of mid twenty twenty three
Speaker 2: are held by the top twenty percent of earners, so
Speaker 2: you know, you're really starting to see that inequality come back.
Speaker 2: But it's also worth noting that after adjusting the data
Speaker 2: for inflation. That level of bank deposits and other liquid
Speaker 2: assets were lower in June than they were in March
Speaker 2: twenty twenty for the vast majority of households. So it's
Speaker 2: important to keep that context as well in terms of
Speaker 2: when we think about how far that money is going.
Speaker 2: And it really goes back to that statistic that Jenna
Speaker 2: said at the beginning of our conversation of one hundred
Speaker 2: dollars in January twenty twenty is about the same as
Speaker 2: a one hundred and nineteen or so today.
Speaker 1: What is the San Francisco FED saying about the state
Speaker 1: of the savings of US households.
Speaker 2: So San Francisco FED has come out with some great
Speaker 2: analysis over time about the state of what we call
Speaker 2: excess savings, which is, you know, the extra savings relative
Speaker 2: to the pre pandemic trend. And they had originally estimated
Speaker 2: that those savings would be fully depleted this year, but
Speaker 2: with revised figures they show that it's not likely to
Speaker 2: be the case until twenty twenty four. But something that
Speaker 2: I think is important when we think about excess savings
Speaker 2: and why, in my opinion, it's maybe not always the
Speaker 2: best way to think about it is that it depends
Speaker 2: a lot on what that pre pandemic trend was. So
Speaker 2: we saw these big revisions by the Bureau of Economic
Speaker 2: Analysis that led economists all across Wall Street to have
Speaker 2: to revise their estimates on how much of these excess
Speaker 2: savings were left. And so the fact that the San
Speaker 2: Francisco FED thinks that there's more access savings left now
Speaker 2: than they did before is not because families saved more
Speaker 2: than they previously thought during the pandemic. It's because they
Speaker 2: saved less before COVID nineteen.
Speaker 3: And regardless of when these excess savings eventually run out,
Speaker 3: we're already seeing that the aggregate increase in savings for
Speaker 3: all income groups peaked in the beginning of twenty twenty two,
Speaker 3: and we can already see in the data that that
Speaker 3: padding for every single income group has been thinning over time.
Speaker 1: So this creates an interesting situation in which you look
Speaker 1: at the economy and it is growing overall, and there
Speaker 1: do seem to be plenty of jobs available if you
Speaker 1: look at the latest data, and the White House President
Speaker 1: Biden in particular, of course, trying to push this idea
Speaker 1: of Biden nomics and how the economy is doing well
Speaker 1: when people don't feel like it's doing well. What role
Speaker 1: will this persistent inflation that we've seen since early twenty
Speaker 1: twenty play with the economy as a big, big wedge
Speaker 1: issue for voters in twenty twenty four.
Speaker 2: So there's a well known adage that was coined back
Speaker 2: in the nineties that says, it's the economy stupid, And
Speaker 2: according to a poll by Bloomberg and Morning Console, it
Speaker 2: very well maybe when it comes to the election. So
Speaker 2: four and ten swing state voters said the economy was
Speaker 2: their top issue in the twenty twenty four election. But
Speaker 2: at this moment, how you feel about the economy very
Speaker 2: much depends on whether you're focused on the jobs market,
Speaker 2: which is characterized by historically low unemployment. We've seen some moderation,
Speaker 2: some cooling, but still things look pretty good there, or inflation, which,
Speaker 2: as we know, has improved but has left prices so
Speaker 2: much higher. I really liked this comment by Betsy Stephenson,
Speaker 2: who is a professor at the University of Michigan and
Speaker 2: a former chief economist at the US Department of Labor,
Speaker 2: and she smartly put this in a recent piece that
Speaker 2: she wrote about American's frustration with the economy, and instead
Speaker 2: of it's the economy stupid, she wrote, it's the price
Speaker 2: is stupid. And I think that was a really good
Speaker 2: way of framing how folks are looking at the economy
Speaker 2: right now and why they are so frustrated.
Speaker 3: I think that being said, whether this issue with Bidenomics
Speaker 3: is a substance stive issue or more of a marketing issue,
Speaker 3: Swing State voters are definitely still torn on whether Bidenomics
Speaker 3: is actually good or bad for the economy. The share
Speaker 3: of respondents who said by days was bad for the economy,
Speaker 3: and an October poll of Swing state voters with Bloomberg
Speaker 3: News and Morning Consult, forty nine percent said Bidenomics was
Speaker 3: bad for the economy, So voters definitely appear to be
Speaker 3: quite split on the issue.
Speaker 1: When biden tries to talk about Bidenomics, is he pointing
Speaker 1: to the slowdown in inflation as his success? Is that
Speaker 1: what he's saying, look at what we've done here.
Speaker 2: I think it's the combination of looking at a historic
Speaker 2: recovery in the economy from an unprecedented recession, frankly, and
Speaker 2: how many jobs have been added, how low unemployment has
Speaker 2: been for a long time, how much wages have grown
Speaker 2: after years of wage growth being rather tepid, as well
Speaker 2: as the fact that inflation has come down a lot
Speaker 2: since last year, and we've reached a point where instead
Speaker 2: of folks talking about a recession like its inevitability, folks
Speaker 2: are rather split on whether we'll see a recession in
Speaker 2: twenty twenty four or not. So there is a lot
Speaker 2: to like about this economy. Me it's growing, and we
Speaker 2: saw a really fast pace of growth in the third quarter,
Speaker 2: But that doesn't change the fact that Americans hate inflation,
Speaker 2: and folks have not experienced inflation to the caliber that
Speaker 2: we've seen in decades. And there's kind of a saying
Speaker 2: that's unemployment happens to your neighbor. Inflation happens to everyone,
Speaker 2: And I think that is something that is very much
Speaker 2: top of mind when we think about these issues on
Speaker 2: a political level.
Speaker 1: How are you thinking about the inflated cost of living
Speaker 1: and whether it starts to ease or how it starts
Speaker 1: to ease. What will you be watching for as all
Speaker 1: the data trickles in each month.
Speaker 2: So from where we are, as Jenna put earlier, when
Speaker 2: we talk about inflation getting better, that doesn't mean that
Speaker 2: prices are going down. It simply means that prices aren't
Speaker 2: rising as fast as they were. So in order for
Speaker 2: Americans to really feel like they are better off and
Speaker 2: that they can look around and be happy with what
Speaker 2: they're looking at, you need to see consistent wage growth
Speaker 2: that's higher than inflation, and so recently we've seen that
Speaker 2: wage growth is outpacing inflation, which is a really good thing.
Speaker 2: You need to see a lot of that, and it
Speaker 2: needs to continue for a long time. So there's not
Speaker 2: a simple fix. It's more of a fix over time,
Speaker 2: and it's something that dependent on whether the economy can
Speaker 2: continue to grow and we can continue to see that
Speaker 2: labor market strength will really depend on how Americans feel well.
Speaker 1: Thank you very much, Jenna Hawk on Bloomberg's data visualization
Speaker 1: team and Read Picker with Bloomberg's economy team.
Speaker 4: Thanks for having us, Thanks so much.
Speaker 2: For having me.
Speaker 1: Thanks for listening to us here at the Big Take.
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