1 00:00:02,520 --> 00:00:08,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Claudia Sam of New 2 00:00:08,720 --> 00:00:13,120 Speaker 1: Century Advisory joins us now to give us some insight. Claudia, 3 00:00:13,160 --> 00:00:15,560 Speaker 1: thank you so much for being with us, and happy 4 00:00:15,640 --> 00:00:18,440 Speaker 1: New Year. What do you make of this Matt's point 5 00:00:18,560 --> 00:00:22,480 Speaker 1: that we've seen unemployment claims basically at the same place 6 00:00:22,680 --> 00:00:23,520 Speaker 1: for almost a. 7 00:00:23,560 --> 00:00:27,720 Speaker 2: Year, right, so you know, as you said, we're not 8 00:00:27,960 --> 00:00:31,520 Speaker 2: seeing signs of deterioration in the labor market, like the 9 00:00:31,600 --> 00:00:34,400 Speaker 2: layoffs have not picked up in a way that was 10 00:00:34,440 --> 00:00:37,120 Speaker 2: the downside risk that the FED has been very acute 11 00:00:37,120 --> 00:00:40,360 Speaker 2: to and we haven't seen that. So we're not seeing 12 00:00:40,400 --> 00:00:43,960 Speaker 2: the bad news story. Frankly, we still need to see 13 00:00:43,960 --> 00:00:46,640 Speaker 2: some good news in the labor market so the claims 14 00:00:46,680 --> 00:00:49,400 Speaker 2: don't get at the piece. It's really been sticky, and 15 00:00:49,440 --> 00:00:52,440 Speaker 2: that's a the hiring rate has been quite low. So yes, 16 00:00:52,520 --> 00:00:54,880 Speaker 2: good news on the continuing claims for this week, but 17 00:00:54,920 --> 00:00:58,760 Speaker 2: they aren't still quite elevated, and so we need a 18 00:00:58,760 --> 00:01:01,000 Speaker 2: little bit more of the good news. You know, the 19 00:01:01,040 --> 00:01:04,360 Speaker 2: fact that the layoffs have not shown up despite you 20 00:01:04,360 --> 00:01:07,199 Speaker 2: know a lot of layoff announcements, like we're not seeing 21 00:01:07,240 --> 00:01:09,600 Speaker 2: them in terms of actual layoffs, and that's good news. 22 00:01:09,800 --> 00:01:13,119 Speaker 1: Quaoudia, do you take anything from the idea that continuing 23 00:01:13,120 --> 00:01:15,200 Speaker 1: claims came in to some of the lowest levels that 24 00:01:15,240 --> 00:01:17,880 Speaker 1: we've seen going back about a month, not significant, and 25 00:01:17,920 --> 00:01:20,640 Speaker 1: they are elevated, as you've said, But does that indicate 26 00:01:20,640 --> 00:01:22,560 Speaker 1: that people are actually finding work. 27 00:01:25,480 --> 00:01:29,480 Speaker 2: It's possible, you know, these are while the claims data 28 00:01:29,520 --> 00:01:31,720 Speaker 2: are very timely. I mean we get a quick read, 29 00:01:32,319 --> 00:01:34,200 Speaker 2: we have to be careful around the turn of the year. 30 00:01:34,480 --> 00:01:37,240 Speaker 2: It's just really tricky with the holidays and you know, 31 00:01:37,360 --> 00:01:39,440 Speaker 2: just reading these data is much harder at the turn 32 00:01:39,480 --> 00:01:41,160 Speaker 2: of the year than say, in the middle of the year, 33 00:01:41,959 --> 00:01:45,240 Speaker 2: but it is. It is potentially a good sign and 34 00:01:45,280 --> 00:01:49,440 Speaker 2: what we're looking for are signs of more stability in 35 00:01:49,480 --> 00:01:52,760 Speaker 2: the labor market, signs that those the hiring rates start 36 00:01:52,840 --> 00:01:55,600 Speaker 2: to pick off a pickup off their very low levels. 37 00:01:55,840 --> 00:01:59,520 Speaker 2: So this is encouraging, but this doesn't make the case yet, right, 38 00:01:59,560 --> 00:02:01,320 Speaker 2: we need to see it in the hiring data. 39 00:02:01,960 --> 00:02:05,560 Speaker 3: Claudia, what what does the labor market look like with 40 00:02:06,000 --> 00:02:09,800 Speaker 3: the stop and immigration, no new people coming to the US, 41 00:02:09,800 --> 00:02:13,400 Speaker 3: and the demographics fewer and fewer people having babies or 42 00:02:13,480 --> 00:02:16,960 Speaker 3: people having fewer babies. It would seem to me that 43 00:02:17,160 --> 00:02:20,120 Speaker 3: if you have the economy growing and we do, and 44 00:02:20,360 --> 00:02:23,560 Speaker 3: corporate revenue and profits growing as we do. 45 00:02:24,800 --> 00:02:25,040 Speaker 2: That. 46 00:02:25,240 --> 00:02:27,680 Speaker 3: You know, lack of supply in the labor pool would 47 00:02:27,720 --> 00:02:30,679 Speaker 3: mean more demand, but it doesn't look like that, as 48 00:02:30,720 --> 00:02:31,400 Speaker 3: you point out. 49 00:02:32,840 --> 00:02:35,799 Speaker 2: Right, well, you know, there are all kinds of timing issues, right, 50 00:02:35,840 --> 00:02:38,240 Speaker 2: it is quite unusual. We saw, you know, in the 51 00:02:38,240 --> 00:02:42,840 Speaker 2: third quarter GDP really you know, moved up higher, and 52 00:02:42,880 --> 00:02:45,680 Speaker 2: so did the unemployment rate, right in a much less 53 00:02:45,760 --> 00:02:48,720 Speaker 2: dramatic fashion, but it is moving higher. And so you know, 54 00:02:48,800 --> 00:02:51,639 Speaker 2: you have the ingredients for the good news story of 55 00:02:51,680 --> 00:02:54,880 Speaker 2: the labor market going into twenty twenty six. Consumers are 56 00:02:54,880 --> 00:02:57,520 Speaker 2: still out there spending. You've still got the business investment. 57 00:02:57,800 --> 00:03:01,600 Speaker 2: You know, companies will need as they expand to draw 58 00:03:01,639 --> 00:03:05,200 Speaker 2: on their labor force. And we should see and I 59 00:03:05,200 --> 00:03:07,640 Speaker 2: think this is the optimism that you can kind of 60 00:03:07,680 --> 00:03:11,280 Speaker 2: see in the minutes from the fed's December meeting. There's 61 00:03:11,320 --> 00:03:13,880 Speaker 2: an outlook there that these pieces should come together and 62 00:03:13,960 --> 00:03:17,080 Speaker 2: we should have hiring pickup. It doesn't necessarily need to 63 00:03:17,080 --> 00:03:19,480 Speaker 2: pick up to levels that we saw, you know, two 64 00:03:19,600 --> 00:03:22,799 Speaker 2: three years ago, when immigration was much stronger, but we 65 00:03:23,200 --> 00:03:25,960 Speaker 2: are at low levels that we have seen wage growth 66 00:03:26,000 --> 00:03:28,239 Speaker 2: slow sum we've seen the unemployment rate tick up. That 67 00:03:28,440 --> 00:03:30,720 Speaker 2: is a sign of the demand for workers is just 68 00:03:30,800 --> 00:03:32,000 Speaker 2: lagging behind the supply. 69 00:03:33,000 --> 00:03:36,760 Speaker 3: Diane Swank pointed out a couple of months ago that 70 00:03:37,240 --> 00:03:40,800 Speaker 3: cutting rates the FED, lowering rates isn't going to help 71 00:03:41,240 --> 00:03:45,160 Speaker 3: consumers in the lower quintile, you know, because subprime rates 72 00:03:45,200 --> 00:03:47,800 Speaker 3: don't come down with the front end of the curve. 73 00:03:48,040 --> 00:03:50,880 Speaker 3: But I wonder if it does help the labor market. 74 00:03:50,920 --> 00:03:54,040 Speaker 3: You know, we've lost I think seventy thousand manufacturing jobs 75 00:03:54,080 --> 00:03:56,360 Speaker 3: this year. We've got a ton of incentives in the 76 00:03:56,600 --> 00:03:59,200 Speaker 3: one big beautiful Bill to I guess bring those back, 77 00:03:59,240 --> 00:04:01,480 Speaker 3: and tariffs are spill to do that too. If those 78 00:04:01,520 --> 00:04:04,160 Speaker 3: things don't work, does cutting rates help to bring back 79 00:04:04,200 --> 00:04:05,280 Speaker 3: manufacturing jobs? 80 00:04:07,040 --> 00:04:10,880 Speaker 2: Well, cutting rates is supportive of both households and businesses 81 00:04:10,960 --> 00:04:14,240 Speaker 2: and expansion, I mean, and particularly say smaller businesses that 82 00:04:14,360 --> 00:04:16,440 Speaker 2: you know, the interest rates that they borrow with that's 83 00:04:16,440 --> 00:04:20,159 Speaker 2: a key, you know, calculus and their decision to expand. 84 00:04:20,160 --> 00:04:22,479 Speaker 2: And as they expand, they can bring on more workers. So, 85 00:04:22,960 --> 00:04:24,880 Speaker 2: you know, I don't you know, we shouldn't have the 86 00:04:25,000 --> 00:04:27,360 Speaker 2: view that the FED has the magic wand here on 87 00:04:27,400 --> 00:04:30,080 Speaker 2: the economy and it's going to on its own revive 88 00:04:30,160 --> 00:04:33,520 Speaker 2: the labor market, but the FED pulling restriction out of 89 00:04:33,560 --> 00:04:36,320 Speaker 2: the economy that does it helps it moves in the 90 00:04:36,400 --> 00:04:38,479 Speaker 2: right direction. And again it's a piece of the puzzle. 91 00:04:38,520 --> 00:04:41,760 Speaker 2: There's also more physical support coming early in the year. 92 00:04:42,200 --> 00:04:46,480 Speaker 2: And it does appear that uncertainty, just broadly about policy 93 00:04:46,520 --> 00:04:49,360 Speaker 2: and maybe some of technological change has weighed on labor 94 00:04:49,360 --> 00:04:52,080 Speaker 2: market this year. And as that dissipates, that's also another 95 00:04:52,240 --> 00:04:54,440 Speaker 2: ingredient to kind of get hiring going again. 96 00:04:54,600 --> 00:04:57,719 Speaker 1: Uncertainty has also been pretty strong because we haven't known 97 00:04:57,760 --> 00:04:59,560 Speaker 1: how much we can trust the data, whether we're going 98 00:04:59,600 --> 00:05:02,120 Speaker 1: to ben get the data. And even in this latest 99 00:05:02,520 --> 00:05:06,240 Speaker 1: batch of numbers or one terminal user points out that 100 00:05:06,520 --> 00:05:09,960 Speaker 1: seasonal adjustment, if you strip that out, you actually see 101 00:05:10,000 --> 00:05:13,520 Speaker 1: initial job as claims that are higher than the previous week. 102 00:05:13,640 --> 00:05:17,040 Speaker 1: So what do you make of these types of seasonal adjustments, 103 00:05:17,080 --> 00:05:21,320 Speaker 1: of these types of calculations that have raised more questions 104 00:05:21,400 --> 00:05:22,360 Speaker 1: than given answers. 105 00:05:23,560 --> 00:05:26,120 Speaker 2: Right well, these issues with seasonal adjustment, these are the 106 00:05:26,560 --> 00:05:30,520 Speaker 2: mainstay of trying to read macroeconomic data. Right Like, as 107 00:05:30,520 --> 00:05:32,520 Speaker 2: I said around the turn of the year, claims data 108 00:05:32,560 --> 00:05:35,279 Speaker 2: are tough from Thanksgiving into early in the year is 109 00:05:35,360 --> 00:05:38,400 Speaker 2: just that that's just a hard, hard read, and so 110 00:05:38,440 --> 00:05:40,080 Speaker 2: you do a lot of averaging kind of look at 111 00:05:40,080 --> 00:05:42,960 Speaker 2: the basic trend, and the basic trend looks pretty good, right, 112 00:05:43,000 --> 00:05:45,200 Speaker 2: So don't make too much out of one week. But yes, 113 00:05:45,320 --> 00:05:49,240 Speaker 2: these are our regular issues. Unfortunately, we're also dealing with, 114 00:05:49,640 --> 00:05:53,239 Speaker 2: you know, the backlog of the government shutdown and data 115 00:05:53,240 --> 00:05:56,080 Speaker 2: collection having been very disrupted, and even as we're getting 116 00:05:56,160 --> 00:05:58,720 Speaker 2: data and the claims data, this is not apply to them, 117 00:05:58,760 --> 00:06:01,360 Speaker 2: but saying like the CPI or the labor market data, 118 00:06:01,720 --> 00:06:05,919 Speaker 2: you know, there's these shutdown casts a long shadow, like 119 00:06:06,000 --> 00:06:08,400 Speaker 2: we have distorted data in a way that we don't 120 00:06:08,440 --> 00:06:11,240 Speaker 2: typically have distortions. We don't typically lose a month of 121 00:06:11,800 --> 00:06:13,800 Speaker 2: data and then try and pick up the pieces afterwards. 122 00:06:13,800 --> 00:06:16,240 Speaker 2: So it does make it more complicated, but you know, 123 00:06:16,279 --> 00:06:18,400 Speaker 2: thankfully there's a lot of information out there. You just 124 00:06:18,480 --> 00:06:20,760 Speaker 2: kind of, you know, pull it all in and get 125 00:06:20,800 --> 00:06:23,440 Speaker 2: a sense of what's going on. And really the tenor 126 00:06:23,480 --> 00:06:28,680 Speaker 2: of the data in general is pretty good, I mean solid. 127 00:06:28,920 --> 00:06:31,120 Speaker 2: Like I said, we still need labor market to pick up, 128 00:06:31,120 --> 00:06:33,120 Speaker 2: but the ingredients are there. 129 00:06:33,520 --> 00:06:35,920 Speaker 1: When I feel want to feel good, I walk down 130 00:06:35,920 --> 00:06:37,800 Speaker 1: the street and I see all these people going to 131 00:06:37,839 --> 00:06:40,240 Speaker 1: stores and being together and going to work, and when 132 00:06:40,240 --> 00:06:42,200 Speaker 1: I want to feel bad, I read the news and 133 00:06:42,240 --> 00:06:44,960 Speaker 1: I read all these stories about how computers are coming 134 00:06:45,000 --> 00:06:48,039 Speaker 1: for our jobs, and how a lot of places are 135 00:06:48,160 --> 00:06:54,160 Speaker 1: seeing opportunities to replace human labor with algorithmic algorithmic programs. 136 00:06:54,200 --> 00:06:56,800 Speaker 1: I'm just wondering, based in the data that you've been 137 00:06:56,800 --> 00:06:59,800 Speaker 1: looking at, how much credence is there behind this sort 138 00:06:59,800 --> 00:07:02,360 Speaker 1: of placement concept of AI. 139 00:07:03,800 --> 00:07:08,320 Speaker 2: Well, I think looking at surveys industry level data that 140 00:07:09,400 --> 00:07:12,400 Speaker 2: when we think about the labor market being somewhat slow 141 00:07:12,480 --> 00:07:15,200 Speaker 2: right now, I don't think that AI really can you know, 142 00:07:15,240 --> 00:07:17,720 Speaker 2: you can point to that as a key driver. Broadly. 143 00:07:17,760 --> 00:07:21,480 Speaker 2: There are some industries in tech, increasingly in finance where 144 00:07:21,480 --> 00:07:24,640 Speaker 2: you see more adoption and there probably are cost savings 145 00:07:24,640 --> 00:07:28,560 Speaker 2: happening with employers. I think, you know, it does fit 146 00:07:28,640 --> 00:07:31,400 Speaker 2: into this piece of the broader uncertainty right like do 147 00:07:31,440 --> 00:07:33,480 Speaker 2: you need to hire? Do you need these workers? That's 148 00:07:33,600 --> 00:07:36,040 Speaker 2: much harder to parse out of the data, because there's 149 00:07:36,040 --> 00:07:38,360 Speaker 2: a lot of different sources of uncertainty right now that 150 00:07:38,400 --> 00:07:42,400 Speaker 2: businesses have. But in terms of you know, the adoption 151 00:07:42,600 --> 00:07:44,920 Speaker 2: really holding back the labor market, I think it's hard 152 00:07:44,920 --> 00:07:47,840 Speaker 2: to point to a broad story, but it is certainly 153 00:07:47,920 --> 00:07:51,000 Speaker 2: something something to watch. But we should also remember that 154 00:07:51,040 --> 00:07:54,440 Speaker 2: the new technology also enables new jobs and new uses 155 00:07:54,880 --> 00:07:57,480 Speaker 2: of technology, So it's not just about saving labor. It's 156 00:07:57,520 --> 00:08:00,760 Speaker 2: also about making labor more productive, and that can be 157 00:08:00,960 --> 00:08:03,080 Speaker 2: a real good news story over the long haul. 158 00:08:03,200 --> 00:08:05,040 Speaker 3: Goottie, I love when you're on because I learned so 159 00:08:05,160 --> 00:08:08,880 Speaker 3: much from you, and because of your notable achievements in economics, 160 00:08:08,920 --> 00:08:11,600 Speaker 3: but also because you went to Dennison and I spent 161 00:08:12,280 --> 00:08:13,960 Speaker 3: a year there. My dad went to Dennis, and my 162 00:08:14,000 --> 00:08:16,240 Speaker 3: mom went to Dennis, and I grew up in Granville. 163 00:08:16,920 --> 00:08:19,760 Speaker 3: What do you think of the value of a college 164 00:08:19,840 --> 00:08:23,239 Speaker 3: education for the average American these days? Because so many 165 00:08:24,200 --> 00:08:28,680 Speaker 3: not just kids, but adults are having trouble meeting repayment 166 00:08:29,000 --> 00:08:33,000 Speaker 3: requirements well into their forties, and it doesn't look like 167 00:08:33,080 --> 00:08:36,960 Speaker 3: recent graduates are getting a huge advantage in the jobs market. 168 00:08:38,480 --> 00:08:41,679 Speaker 2: All right, Well, technical skills and training are. I mean, 169 00:08:41,679 --> 00:08:44,640 Speaker 2: they're always important for getting ahead. They do payoff. I 170 00:08:44,679 --> 00:08:47,680 Speaker 2: have a very ecumenical view. I had an excellent education 171 00:08:47,720 --> 00:08:50,440 Speaker 2: at Dennis and University Liberal Arts College, but that's not 172 00:08:50,559 --> 00:08:53,599 Speaker 2: for everybody. I mean, my daughter's in engineering school Illinois. 173 00:08:53,640 --> 00:08:56,320 Speaker 2: She's you know, different technical training, and I think you 174 00:08:56,360 --> 00:08:59,000 Speaker 2: know in the trades and there's there are lots of 175 00:08:59,000 --> 00:09:01,240 Speaker 2: ways to gain skill, and we certainly don't want to 176 00:09:01,280 --> 00:09:03,840 Speaker 2: push every child through a college education, particularly with the 177 00:09:03,880 --> 00:09:07,400 Speaker 2: cost of it. But it doesn't you know. I still 178 00:09:07,440 --> 00:09:10,160 Speaker 2: think you know, and the data bear this out. Like 179 00:09:10,240 --> 00:09:12,680 Speaker 2: the education and the skills, they do pay off. 180 00:09:13,440 --> 00:09:16,120 Speaker 1: Claudia Sum of New Century Advisors, wonderful to see you, 181 00:09:16,200 --> 00:09:18,880 Speaker 1: Happy new year. Thank you so much, see you in 182 00:09:18,960 --> 00:09:20,160 Speaker 1: twenty twenty six.