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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: We learned today as well, alex let US consumer confidence

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Speaker 2: dropped to a five month low in December, driven by

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Speaker 2: concerns over the economy and potential Trump policies. In a

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Speaker 2: survey by the Conference Board, forty six percent of respondents

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Speaker 2: expected tariffs to raise their cost of living. Joining us

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Speaker 2: now to discuss is the researcher behind the reward Dana Peterson,

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Speaker 2: chief economist at the Conference Board. So, Dana, I mentioned

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Speaker 2: those numbers. Present situation was fine, came in at one

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Speaker 2: forty point two, just a little bit down from one

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Speaker 2: forty point nine the previous month, but expectations were down

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Speaker 2: almost eleven points down from ninety two point three to

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Speaker 2: eighty one point one. How concern should we.

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Speaker 1: Be Well, certainly, the present situation, as you said, was

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Speaker 1: only a tick downward, but the expectations really fell backward

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Speaker 1: after several months of improvement. And it was across all

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Speaker 1: three components of that. That's business conditions on what they

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Speaker 1: think about employments six months ahead, and also incomes.

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Speaker 3: Was that shown on party lines at all? I'm just

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Speaker 3: wondering because a lot of it was led by the

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Speaker 3: tariff increase expectation.

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Speaker 1: Right. Well, we did ask a special question about what

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Speaker 1: consumers are thinking about in terms of policy for next year,

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Speaker 1: and certainly many of them are concerned about tariffs and

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Speaker 1: whether or not tariffs are going to be inflationary or not.

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Speaker 1: And indeed, in the write ends where we ask consumers

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Speaker 1: what's the most important thing that you think will impact

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Speaker 1: the economy good or bad, certainly prices leapt up inflation

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Speaker 1: to the top, but also not long out, not far

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Speaker 1: after that, we're certainly elections presidents. And also the word

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Speaker 1: tariff actually searched from zero to something notably positive. So

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Speaker 1: consumers are paying attention to what's going on in politics,

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Speaker 1: and they're starting at least they're curious to know what

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Speaker 1: that's going to mean for their bottom lines.

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Speaker 2: Yeah, I mean, it's more fodder for the Federal Reserve

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Speaker 2: Right to continue to focus on inflation or to refocus

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Speaker 2: on inflation again. And as opposed to the unemployment part

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Speaker 2: of the Monday, which it looked like they had been

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Speaker 2: at least swerving towards.

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Speaker 1: Well, it seems like it is something that FMC participants,

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Speaker 1: at least some of them, according to Chair Powell, are

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Speaker 1: looking at and did fold in their expectations of what

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Speaker 1: policy might look like next year and the impacts on

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Speaker 1: the consumer. Certainly, we have the debt ceiling rolling around,

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Speaker 1: we have the tax cliff of twenty twenty six that's

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Speaker 1: going to need to be dealt with, and certainly there

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Speaker 1: are the threats of renewed or at least intensified trading wars.

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Speaker 1: Trade wars because certainly the tariffs that were put in

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Speaker 1: place years ago were never lifted and we could see

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Speaker 1: more that again will impact consumers because companies that have

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Speaker 1: to pay those tariffs here in the US are just

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Speaker 1: going to pass on those costs to the consumer.

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Speaker 3: That's sort of also my question on that is that

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Speaker 3: this data was very different from the rest of the

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Speaker 3: surveys that we've gotten on the consumer. And I'm wondering

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Speaker 3: why you think that's different and why the feeling then

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Speaker 3: that maybe the terroiffts will get passed on to the consumers.

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Speaker 3: I'm thinking about you Mish, for example, there was some

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Speaker 3: stockpiling and sort of buying now and not later because

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Speaker 3: of tariffs. But what did you make of the negativity

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Speaker 3: in your report versus other surveys.

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Speaker 1: Well, I mean, again, just looking at the headline it's

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Speaker 1: made up of five different indicators. Two are about business,

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Speaker 1: two are about the employment situation now in the future,

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Speaker 1: and the other ones about income. So when you put

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Speaker 1: all those things together, as I mentioned, business, employment and

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Speaker 1: income were down, but the index itself does not reflect

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Speaker 1: anything about politics. So we're understanding the thoughts that consumers

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Speaker 1: are interested or and some of them are concerned from

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Speaker 1: our special question that we asked and also from the

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Speaker 1: right ins which we usually do report on. So you know,

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Speaker 1: all the writings were pretty mixed. Some said that they

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Speaker 1: were excited about what's going to happen next year, others weren't.

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Speaker 1: But certainly, I think consumers who've just experienced a lot

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Speaker 1: of inflation and prices are certainly much higher now than

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Speaker 1: they were before the pandemic, are focused on inflation, and

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Speaker 1: certainly the risks around that come from things that are

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Speaker 1: already putting up pressure on inflation, including insurance, labor costs

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Speaker 1: from labor shortages. Also, housing costs aren't falling as fast

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Speaker 1: as we want. But there's also potential for some things

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Speaker 1: that might be inflationary in twenty twenty five, and they're

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Speaker 1: all focused on that right now.

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Speaker 2: Just briefly, Danna what did you make of the rest

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Speaker 2: of the data out today? We had new home sales

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Speaker 2: for November, not as good as Anticipator, but still higher.

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Speaker 1: Yeah. So, actually, when we ask consumers about whether or

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Speaker 1: not they're going to purchase homes, we've seen a little

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Speaker 1: bit of an improvement over the last six months, but

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Speaker 1: it's still pretty low. But the good news is that

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Speaker 1: despite the fact that consumers are concerned or worried or

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Speaker 1: thinking about the next year, they still plan to buy.

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Speaker 1: They're still planning on buying cars, especially use cars, but

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Speaker 1: also new cars. They're planning on going on vacation a

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Speaker 1: little bit less, but if they go on vacation, looking

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Speaker 1: to go on international vacations. And when it comes to services,

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Speaker 1: they're still looking at experiential services like going to the

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Speaker 1: movies or streaming, or going to hotels and restaurants and

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Speaker 1: that sort of thing. So, despite whatever they're worried about,

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Speaker 1: consumers still think that right now, it's easy to find

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Speaker 1: a job, and as long as they are working, we

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Speaker 1: think that they're going to continue to spend, and potentially

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Speaker 1: that spending will lean against some of the downside risks

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Speaker 1: that we see for next year.

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Speaker 3: Yes, all right, Dana thanks a lot, really appreciate Dana Peterson,

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Speaker 3: chief Economists at the conference Board