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

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and am Marie Hordern. Join us each

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Speaker 2: day for insight from the best in markets, economics, and

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Speaker 2: Bloomberg Terminal and the Bloomberg Business app.

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Speaker 1: Hey Moore of City has been cautioning people recently, writing this,

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Speaker 1: we view a nearly newly announced tariffs as a headwind

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Speaker 1: to further equity upside. We are moving to a new

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Speaker 1: phase of policy and trade uncertainty. Kate joins us. Now, Kate,

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Speaker 1: thank you so much for being with us. You've been cautious.

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Speaker 1: You've been cautious for a while. You're still cautious. What

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Speaker 1: makes you hold onto this position even though a lot

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Speaker 1: of people have been It's a pain trade.

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Speaker 3: Yeah, so, I mean we need to separate this out.

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Speaker 3: I have been cautious, concerned with some of the policy

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Speaker 3: headwinds with some of the challenges that individuals have in

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Speaker 3: terms of making spending decisions. That doesn't mean we've been

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Speaker 3: underweight equities. These two things are not the same. We

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Speaker 3: have been neutral weight equities, but we prefer to express

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Speaker 3: our view, you know, up in quality like a lot

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Speaker 3: of people, and more concentrated in the kind of the

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Speaker 3: megacaps and the secular growers. So if I felt really,

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Speaker 3: really like we were going to be in an accelerating

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Speaker 3: growth phase, I'd be rotating more into the small caps

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Speaker 3: as something more than a trade and into like a

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Speaker 3: kind of an investment. But that's not it. So my

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Speaker 3: caution expresses itself in more of a neutral weighting and

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Speaker 3: a bias towards high quality and a bias towards large caps.

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Speaker 1: Although there is this issue of valuation at a time

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Speaker 1: when everybody's hotalating out in this So at what point

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Speaker 1: does that become a concern for you, given the fact

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Speaker 1: that everyone's hiding out in these megacaps and big tech

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Speaker 1: has been the story yet again of the year.

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Speaker 3: You know, Lisa, I would be a little bit more

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Speaker 3: concerned if the companies didn't put up good numbers in

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Speaker 3: the second quarter, right you know, multiples can stay high

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Speaker 3: for extended periods of time, they can send stay cheap

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Speaker 3: for extended periods of time. And we're in an era

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Speaker 3: where a lot of information gets priced into shares very

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Speaker 3: very quickly. So you know, there's this mispricing that maybe

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Speaker 3: some of us grew up with in earlier stages of

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Speaker 3: our careers is less likely to persist. And things are

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Speaker 3: expensive because they have secular earnings, because they have an

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Speaker 3: ability to grow through all parts of the economic cycle,

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Speaker 3: because they're in the fastest rivers. You know, this is

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Speaker 3: I think justified for some of these megacaps. Even if

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Speaker 3: I look at some of these numbers and like many

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Speaker 3: people feel a little uncomfortable.

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Speaker 4: Everyone on the street is talking about how they want

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Speaker 4: to be a buyer of the pullback. Well, oh yeah,

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Speaker 4: when's the pullback?

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Speaker 3: A fullback? Can we get in that environment? You know,

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Speaker 3: I think that's right. You know, we've looked at you know,

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Speaker 3: seasonality like everyone else and said August and September weeker times,

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Speaker 3: we tend to get some of these air pockets. You know,

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Speaker 3: I have perhaps a little bit more cautious stance on

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Speaker 3: some of the tariffs that hit today, and this is

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Speaker 3: what I would say. Everyone's saying, if we get a

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Speaker 3: five percent pullback or seven percent pullback, you know, they

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Speaker 3: go all in, they back up the truck. The problem

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Speaker 3: is is that no one's going to wait for those levels.

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Speaker 3: I think these pullbacks are going to be quite shallow,

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Speaker 3: even if we get a decent amount of volatility through

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Speaker 3: what is normally a seasonally weaker period.

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Speaker 4: They uncertainty around tariffs. On the other side of the coin,

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Speaker 4: you are looking at potentially the incentives for the one big,

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Speaker 4: beautiful bill you're starting to see that now actually take effect.

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Speaker 3: I don't think corporates really know how to guide us

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Speaker 3: on this one. So I hear a lot of people say, hey,

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Speaker 3: we're only talking about a fifteen percent give or take

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Speaker 3: like effective terriff, Right, it's not that much. Of course,

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Speaker 3: we all know how much it is relative to where

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Speaker 3: we ended twenty twenty four. But the bigger question I

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Speaker 3: have is when people make these assumptions about it not

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Speaker 3: having a large impact, how are they splitting the cost

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Speaker 3: between the suppliers, the company, and the end consumer. And

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Speaker 3: everyone has a lot of assumptions baked into why it

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Speaker 3: won't be a big deal for XYZ company, companies don't

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Speaker 3: know what to say, They don't know how much they're

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Speaker 3: going to be able to push.

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Speaker 1: I think a lot of.

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Speaker 3: What's happened since the April second tarif announcements has been

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Speaker 3: companies have been eating some of this in their margins,

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Speaker 3: or they've been spreading out costs across a variety of

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Speaker 3: different products, or they've been holding off an investment, you know,

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Speaker 3: trying to fund as much of it as possible. But

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Speaker 3: as some of these things get baked in for longer

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Speaker 3: periods of time, there's going to be more durable impact

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Speaker 3: on both margins and on the consumer. And frankly, I

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Speaker 3: don't know either exactly what that looks like.

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Speaker 1: Do you think it's going to be worse in the

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Speaker 1: US than the rest of the world.

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Speaker 3: I think it's going to be worse. I think it's

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Speaker 3: going to be bad in a number of places. I

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Speaker 3: will say that US companies and consumers are going to

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Speaker 3: feel the pain. I think we're at the very beginning

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Speaker 3: stages of seeing some of the teriff impacts on good

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Speaker 3: price goods prices. Whether or not that changes the consumption,

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Speaker 3: you know, our appetite for like the average household, I'm

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Speaker 3: not sure or whether we see, as we've heard from

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Speaker 3: some of the retailers, spreading out tariff costs across a

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Speaker 3: variety of products that otherwise would not be directly hit

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Speaker 3: in order to make sure that people still I'll come

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Speaker 3: into the store and that we don't see a significant

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Speaker 3: decline in retail sales.

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Speaker 1: Well, I guess I'm wondering how much of the dollar

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Speaker 1: weakening story is really pegged to this ongoing belief that

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Speaker 1: the United States is going to suffer the brun of

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Speaker 1: any kind of economic slowdown on the keels of tariffs.

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Speaker 1: That's been challenged certainly with some earnings, certainly with some

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Speaker 1: of the rates that we've seen, as well as the

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Speaker 1: commentary out of central banks. I mean, how much do

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Speaker 1: you lean into that versus pushback against it and say,

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Speaker 1: hold on a second, when you actually look at the

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Speaker 1: corporate earnings, so still have performing in the US totally

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Speaker 1: in a significant way.

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Speaker 3: Yeah, I mean, I guess you know, the conversation we

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Speaker 3: were having in the beginning part of this year about

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Speaker 3: the end of US exceptionalism was really like, it is

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Speaker 3: really not going to play itself out in the equity

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Speaker 3: market in my view, you know, if we get fewer

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Speaker 3: buyers or fewer marginal buyers of you know, long duration

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Speaker 3: in US bonds or people thinking about their currency exposures.

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Speaker 3: That's one thing, but we still have to invest, if

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Speaker 3: you're at a global multi asse investor and equity investor,

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Speaker 3: in the highest quality companies that are serving all parts

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Speaker 3: of the world. And unfortunately, for those people that didn't

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Speaker 3: want to own the US much of those, many of

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Speaker 3: those are US companies.

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Speaker 4: If you think we're in the start of potential to

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Speaker 4: impact of the tariffs on inflation, what does the FED do?

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Speaker 3: Gosh, I am so glad I'm not a FED policymaker.

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Speaker 3: This is an incredibly difficult time.

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Speaker 4: What are you baking in kind of impact corporate America.

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Speaker 3: I think it's very likely that we will see some easing,

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Speaker 3: but I think the FED is in a really difficult

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Speaker 3: place here. You know, if they cut while the labor

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Speaker 3: market is frozen but not deteriorating, right, I think we

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Speaker 3: need to distinguish and inflation is continuing to percolate. You know,

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Speaker 3: people are going to ask themselves, like, you know, if

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Speaker 3: the FED is really anchored to this two percent target

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Speaker 3: or getting to that two percent target, and we've been

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Speaker 3: above that two percent target for four years, and the

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Speaker 3: labor market is frozen but not deteriorating. You know, can

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Speaker 3: we believe that you think in the frozen now or deterion. Well,

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Speaker 3: we haven't seen huge layoffs at this point, right you know,

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Speaker 3: job recks not failled for sure, and we certainly see

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Speaker 3: a lot of companies talk about slowing down their hiring.

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Speaker 3: But from my perspective, I can't desactgate how much of

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Speaker 3: that is because of tariffs and economic uncertainty, and how

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Speaker 3: much of it is because the technology they're investing in

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Speaker 3: may displace workers. I mean, these things are all happening concurrently.

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Speaker 1: Right now. You see a market pricing in fifty basis

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Speaker 1: points of rate cuts. Yeah, if the FED were to

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Speaker 1: cut more this year, does that make you more bearish

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Speaker 1: on longer term treasures?

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Speaker 3: It makes me cautious, I think on longer term treasuries,

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Speaker 3: you know, we have had a more cautious stance. I

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Speaker 3: think it's very consensus for a lot of us in

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Speaker 3: the multi asset space to have been really anchored to

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Speaker 3: the short duration and we're all waiting for an opportunity

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Speaker 3: to add to duration. I just I'm just not excited

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Speaker 3: about it. In the near term.

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Speaker 1: Kate Moore, thank you so much for being with us.

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Speaker 1: As always, Kate, more of City. Well, I'm joining us

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Speaker 1: now as former NYC deputy director, Everett Eisenstadt. Everett, thank

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Speaker 1: you so much for being with us. I want to

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Speaker 1: just start with what we know today in terms of

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Speaker 1: the tariffs that have gone on, the details of that

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Speaker 1: and what's to come over the next three weeks.

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Speaker 5: Well, this is a really big day. You know. The

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Speaker 5: President has been signaling these tariffs on the way for

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Speaker 5: well since he was elected on January twentieth, with his

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Speaker 5: America First Trade agenda, and he's put different measures to

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Speaker 5: kind of tease out the rates in different methodologies, using

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Speaker 5: different statutes, and now we've come to the place where

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Speaker 5: today they're actually going to go into effect, and we

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Speaker 5: know what the teriff rates are going to be on

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Speaker 5: the reciprocal tariffs for particular countries. You have some of

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Speaker 5: them up there, as you know do They range from

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Speaker 5: fifteen to fifty percent and for different purposes. We also

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Speaker 5: have a number of the sectoral tariffs in place, in

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Speaker 5: addition to investment commitments from some of our trading partners,

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Speaker 5: so there's a lot of the President's trade agenda that

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Speaker 5: is now in place, including the Framework Agreements. Now, the

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Speaker 5: Framework Agreements are going to be a guidepost really about

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Speaker 5: how to move forward with these economies. They're not perfect,

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Speaker 5: they need continued negotiation, but they do demonstrate directionality. So

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Speaker 5: I think we've got a bit more clarity than we

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Speaker 5: did a few months ago, and we really now see

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Speaker 5: what the President's agenda is going to look like in operation.

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Speaker 4: When it comes to the President's agenda, though, there's two

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Speaker 4: countries that it does seem like they're still a negotiating mode,

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Speaker 4: India and Switzerland. Do you think we're going to see

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Speaker 4: those rates come down?

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Speaker 5: I do certainly with Switzerland. I look at the US

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Speaker 5: Swiss relationship and it is so interconnected and we're such

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Speaker 5: important allies. I think the Swiss were a bit shocked,

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Speaker 5: candidly at the rate. I don't know if that was

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Speaker 5: just a botch negotiation or how they ended up in

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Speaker 5: one of the highest rates in the world. Of course,

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Speaker 5: a lot of it has to do with the trade

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Speaker 5: deficit and how the President sees that trade deficit. But

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Speaker 5: there's a lot that we share with with Switzerland, particularly

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Speaker 5: on intelligence and things of that nature. So I think

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Speaker 5: that one it will come to settlement at some point.

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Speaker 5: In fact, they were in Washington yesterday seeking to find

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Speaker 5: a framework deal. India's a much much more complicated equation

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Speaker 5: that one was noted was started out with such a

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Speaker 5: great dynamic between President Modi and President Trump. It really

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Speaker 5: has deteriorated, and if anything, that become more polarized over

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Speaker 5: time and almost every day.

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Speaker 4: When it comes to well when it comes to India,

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Speaker 4: is the President basically putting geopolitical priorities in terms of Russia,

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Speaker 4: ahead of some of the economic priorities.

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Speaker 5: I think it's a combination of both. And if you

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Speaker 5: noted that the secondary sanctions, which are a new concept

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Speaker 5: that the President actually authorized himself to deploy not just

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Speaker 5: against India but other countries yesterday, are being used on India,

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Speaker 5: not China. So I think it's selective, but I think

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Speaker 5: it's a tool that he will use and when he

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Speaker 5: feels like a relationship is not moving in the right direction,

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Speaker 5: he'll use every tool he can to get leverage. And

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Speaker 5: if it's a geopolitical reason, then that certainly a valid

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Speaker 5: reason to do that. So I think it's a combination

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Speaker 5: of factors. It's going to take some work and time

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Speaker 5: to rebalance that relationship. I don't know that's going to

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Speaker 5: happen soon, but we're definitely going to have to watch.

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Speaker 5: And of course the secondary sanctions has noted. New tool

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Speaker 5: could have new dynamics for other economies, So that's going

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Speaker 5: to be an important concept that we'll need to keep

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Speaker 5: your eye on.

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Speaker 1: R Does it sound like something that is going to

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Speaker 1: be used with China? Is that sort of the objective here,

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Speaker 1: not only to pressure Russia, but also to put this

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Speaker 1: on the table ahead of some sort of g Trump

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Speaker 1: meeting to say we could go there too.

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Speaker 5: It could. I mean, we tried that right the President

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Speaker 5: put prohibitive terrorists on China. It didn't work out so well.

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Speaker 5: It really was incredibly disruptive, and China responded by withholding

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Speaker 5: exports of materials that were needed for manufacturing in the

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Speaker 5: United States. So I'm not sure that we're to go

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Speaker 5: there again that quickly, but the fact that the tool

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Speaker 5: is there is definitely signal, and we'll see how the

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Speaker 5: relationship between the US and China unfolds. The President wants

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Speaker 5: to get to a place with China where we can

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Speaker 5: have a more productive relationship. I think that's clear. He's

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Speaker 5: moving in that direction, I think putting sanctions on China's

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Speaker 5: secondary sanctions would not lead to that goal, so I

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Speaker 5: don't expect that to happen in the near term. On

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Speaker 5: the other hand, he is meeting with Russia, and so

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Speaker 5: in many ways these sanctions could be as a message

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Speaker 5: to Russia as much as they are to India and China.

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Speaker 5: But again, new tool. It's unprecedented. President has used tariffs

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Speaker 5: in ways they couldn't have even been imagined really to know,

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Speaker 5: prior to his election. So I'm sure there's a lot

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Speaker 5: more creativity there, and it's something you know that's going

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Speaker 5: to continue to be a factor even though we've got

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Speaker 5: a lot of the central elements of the president's trade

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Speaker 5: in place.

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Speaker 1: Now I've rediss had a former NEC deputy director. Thank

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Speaker 1: you so much for being with us, Bloomberg Standy Berger

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Speaker 1: joins us now with a special guest, Danny Lisa.

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Speaker 6: Thank you so much. It is such an important earning

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Speaker 6: season for just that understanding the consumer and their sensitivity

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Speaker 6: to this economy. I'm pleased to say joining us now

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Speaker 6: is someone who understands the consumer very well. It is

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Speaker 6: Mark Hopomasian, the CEO and president of Hyatt. Mark thank

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Speaker 6: you so much for joining this morning. You're out with

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Speaker 6: earnings moments ago. Earlier this year you had to cut

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Speaker 6: earnings because of your outlook on some of the weaker

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Speaker 6: reservation trends. Going forward, you've mostly held on to that look.

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Speaker 6: So what if anything has changed for the consumer and

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Speaker 6: the demand you're seeing?

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Speaker 7: Well, Danny, first of all, thanks for having me. You know.

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Speaker 7: The first point that I have to make is that

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Speaker 7: travel is extraordinarily resilient. It's become a necessity for both

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Speaker 7: leisure travelers and for business travelers. The second quarter was

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Speaker 7: a weaker quarter for business travel, but leisure held up

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Speaker 7: really really strongly, and are us orts were up mid

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Speaker 7: single digits for the first half of the year. Europe

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Speaker 7: was up almost seven percent in leisure. So leisure, especially

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Speaker 7: the luxury segment, in the luxury segments, which luxury has

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Speaker 7: been up about six or seven percent year to date,

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Speaker 7: as well the higher end customer, which is that our

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Speaker 7: core customer base with seventy percent of our portfolio and

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Speaker 7: luxury and full service is alive and well. So I

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Speaker 7: would say a couple of things have happened right now.

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Speaker 7: The first is that our largest corporate customers have told us.

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Speaker 5: They're not.

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Speaker 7: They're going to lean in and continue to travel, and

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Speaker 7: they're making more commitments, especially for customer facing events and meetings.

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Speaker 7: The second thing that happened is that we saw bookings

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Speaker 7: for twenty twenty six really improve for big group meetings.

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Speaker 7: And third, the Conference Board and the Business Council released

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Speaker 7: their CEO sentiments surveyed this morning and things have turned now.

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Speaker 7: Tariffs and volatility have declined to number three on the

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Speaker 7: list from number one, and their outlook with respect to

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Speaker 7: potential recession has dropped dramatically. So I think the attitude

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Speaker 7: and mindset for a lot of CEOs is shifting.

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Speaker 6: Mark that's very fascinating because the tarff picture is still

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Speaker 6: evolving as we go on. So are there any pockets

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Speaker 6: where you're still seeing those fears of economic anxiety or

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Speaker 6: to your point, is it now confidence restored?

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Speaker 7: No, we are, And in a word, it's China. The

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Speaker 7: caution and conservatism in China is clear, and a lot

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Speaker 7: of people are uncertain about what a so called tariff

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Speaker 7: war or the tariff picture might do to the economy. Overall,

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Speaker 7: there's an increasing I think body of thought that says

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Speaker 7: that Beijing pays a lot of attention to sentiment, and

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Speaker 7: the sentiment is definitely one of a very significant caution

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Speaker 7: right now. So I think there's an expectation that sometime

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Speaker 7: in the fall there may be policy shifts that alleviate

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Speaker 7: some of that and bring back a stimulus for growth.

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Speaker 7: So I would say you.

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Speaker 6: Jump in because I wanted to get to luxury because

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Speaker 6: you mentioned that this is one of the strong suits

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Speaker 6: and really resilient. Of course you've doubled down on the

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Speaker 6: luxury strategy too, but it is a time where there

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Speaker 6: is more competition and maybe that aspirational traveler needs a

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Speaker 6: little bit more convincing that they should be paying up

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Speaker 6: for the one thousand plus a night type of all

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Speaker 6: inclusive resorts. So what do you need to do in

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Speaker 6: terms of strategy to convince them that paying up is

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Speaker 6: worth it.

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Speaker 7: Well, our awn inclusive business is up six or seven

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Speaker 7: percent year to date, eight percent if you include Europe.

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Speaker 7: It's been wildly resilient. We are the leader in five

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Speaker 7: star luxury all inclusive resorts. I think the certainty of

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Speaker 7: what your vacation will cost you and the experience on

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Speaker 7: property where our college are not thinking about or engaged

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Speaker 7: in how much something costs but rather full on human

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Speaker 7: to human service makes a difference to people, and so

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Speaker 7: the format has really really proven to be very, very

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Speaker 7: popular and will continue to do so. We just closed

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Speaker 7: on the acquisition of Apply Hotels and Resorts, twenty six

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Speaker 7: hundred new hotel rooms in premier beachfront locations, and we

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Speaker 7: have a deal to sell all the real estate, so

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Speaker 7: we will maintain our assetlite status. It's a great deal

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Speaker 7: and adds sixty five million dollars in new fees to

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Speaker 7: our run rates, so I think we're quite pleased with that.

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Speaker 7: So we're definitely doubling down on luxury, and we're definitely

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Speaker 7: doubling down on all inclusive well mark.

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Speaker 6: Just to that point, it's been a really hot summer,

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Speaker 6: a really hectic summer. I think a lot of people

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Speaker 6: are looking for inspiration of where to travel right now?

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Speaker 6: Where is the most demands? Where are you seeing most

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Speaker 6: people go to? What's in fashion right now?

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Speaker 7: Yeah? I would say the US traveler has headed to

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Speaker 7: Europe this summer. We thought we would see a massive

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Speaker 7: decline from last year, be given the Olympics and Taylor Swift,

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Speaker 7: but they're back in Europe and Europeans are staying in Europe,

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Speaker 7: but I would say the diversity of destinations has increased

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Speaker 7: a lot of interest in Central and South America and

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Speaker 7: the Caribbean, and Mexico continues to be in great demand

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Speaker 7: both amongst Europeans, and the Canadian volume into our Mexican

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Speaker 7: and Caribbean resorts is significantly above last year. A lot

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Speaker 7: of people have talked about the flyover effect where Canadians

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Speaker 7: are heading over the US to get to Mexican and

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Speaker 7: Korean destinations, and we're seeing it significantly.

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Speaker 6: All right, So Europe staying in Europe, Canadians skipping over

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Speaker 6: the US definitely a trend there. Mark, thank you so

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Speaker 6: much for joining us this morning. Mark Hopplomasian, the CEO

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Speaker 6: of Hyatt Lisa, you are seeing a rebound in business travel,

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Speaker 6: but China remains a weak spot.

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Speaker 5: Yeah.

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Speaker 1: That's something that has been a theme for a number

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Speaker 1: of you as companies. Stannyburger, great work. Thank you so

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Speaker 1: much for the.

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Speaker 3: Joining us.

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Speaker 1: Now is Ylena Soeteva of the conference board. Yolena, just

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Speaker 1: on that point, how much is this indicating some sort

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Speaker 1: of weakness the idea that it is so difficult for

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Speaker 1: people or more difficult, I should say for people out

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Speaker 1: of the workforce to find their way back in.

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Speaker 8: Look, the data this morning actually shows the same kind

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Speaker 8: of thing that it's been showing over the next Over

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Speaker 8: the last several months, the in short unemployment rate remained

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Speaker 8: at around one point three percent, and you know that's

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Speaker 8: why it's been over the last several months, so we

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Speaker 8: have seen a little bit of a pickup from the trough.

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Speaker 8: But the idea is that you know, there's not been

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Speaker 8: that much more in the unemployment rate despite the fact

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Speaker 8: that the pace of job creation has slow And that's

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Speaker 8: the point that.

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Speaker 7: You empowered me.

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Speaker 4: Kay mor was just talking about the fact that is

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Speaker 4: the labor market frozen or actually deteriorating. What do you think?

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Speaker 8: I think it's frozen. So a couple of things to mention.

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Speaker 8: So if you look at the data from the employment

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Speaker 8: report last week, you'll see that the increase in the

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Speaker 8: unemployment rate since its through back in twenty twenty three

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Speaker 8: has mainly been driven by people's inability to find a job,

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Speaker 8: so kind of long term unemployment, and not by new layoffs.

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Speaker 8: So that's point number one. Another thing is that this

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Speaker 8: morning we saw a release of CEO Confidence, a report

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Speaker 8: for the third quarter of this year that is in

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Speaker 8: conjunction with the business Counsel and the conference board. So

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Speaker 8: you know, CEOs are feeling a little bit more optimistic.

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Speaker 8: So confidence among US C suite, you know, actually increased

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Speaker 8: in the third quarter after collapsing in the second quarter.

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Speaker 8: But CEOs are still citing difficulty finding qualified workers. What

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Speaker 8: it means is that they will probably not be laying

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Speaker 8: off people unless it's absolutely necessary. So that's what we

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Speaker 8: hear from them. One thing is that you know, CEOs

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Speaker 8: mentioned that they may be reducing the labor force and

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Speaker 8: that you know, share of those CEOs exceeded the share

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Speaker 8: of CEOs that were expecting an increased in the labor force,

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Speaker 8: but still the majority of CEOs are expecting no change

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Speaker 8: in the labor force. You know, it still freshened their

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Speaker 8: memory after the COVID recession that when they laid off

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Speaker 8: a lot of workers, they had a huge difficulty hiring

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Speaker 8: them back. And well, it's the circumstance is a different now.

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Speaker 8: You still have a reduction in the overall availability of

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Speaker 8: labor among immigrations lowdown, so that is creating, you know,

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Speaker 8: an issue for those CEOs.

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Speaker 4: Well, CEOs are looking to lay off people when it

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Speaker 4: comes to circumstances. Is it because they're dealing with higher

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Speaker 4: teriff rates and they need to make sure that they

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Speaker 4: are basically hoarding some more cash. Or is it because

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Speaker 4: what's going on in AI.

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Speaker 8: Well, at some point you have to cut costs, right,

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Speaker 8: So labor is the most expensive thing, you know, the

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Speaker 8: highest cost for a company. So when you know when

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Speaker 8: your profit margins shrink and you just faced with the

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Speaker 8: fact that you have to cut costs, that's where you

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Speaker 8: go and look, but I don't think that is actually

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Speaker 8: going to happen in the next few months or so.

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Speaker 8: Look at unit labor costs, right, So they are decelerating

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Speaker 8: in unit labor because the data another data released this morning,

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Speaker 8: you see some deceleration in that metric, and that tells

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Speaker 8: you that labor is getting well, at least not more

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Speaker 8: expensive in that.

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Speaker 1: Sense, Elena, One thing that we kept hearing this week,

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00:23:16,800 --> 00:23:20,639
Speaker 1: including from Steve and ath a Federated Hermes, was that

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00:23:20,720 --> 00:23:22,879
Speaker 1: a lot of the hard data is backward looking, and

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00:23:22,920 --> 00:23:25,680
Speaker 1: that actually a lot of companies have more confidence now

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00:23:26,000 --> 00:23:29,520
Speaker 1: they have more certainty. The uncertainty was paralyzing. Now that

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00:23:29,680 --> 00:23:32,720
Speaker 1: is lifted just a touch and you can see a

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00:23:32,760 --> 00:23:36,240
Speaker 1: better path forward that actually you are seeing confidence start

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Speaker 1: to pick back up and that maybe things are turning

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Speaker 1: in the other direction. Do you see any signs of

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00:23:42,400 --> 00:23:45,600
Speaker 1: that from where you said that that's actually what's going on.

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00:23:46,440 --> 00:23:48,800
Speaker 8: Yes, we do talk to a lot of CEOs at

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00:23:48,840 --> 00:23:52,359
Speaker 8: the conference board, and again the latest report on CEO

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00:23:52,480 --> 00:23:57,320
Speaker 8: confidence is actually telling you just that. So it collapsed.

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Speaker 8: Confidence collapsed in the second quarter of the year, but

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00:24:00,920 --> 00:24:05,480
Speaker 8: it recovered substantially in Q three, and that report covers

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00:24:06,119 --> 00:24:09,800
Speaker 8: the period of the second half of July essentially, so

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00:24:10,560 --> 00:24:14,320
Speaker 8: when we were getting a little bit more certain about

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00:24:14,960 --> 00:24:19,520
Speaker 8: the level and the ultimate size of tariffs. So now

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00:24:19,600 --> 00:24:24,760
Speaker 8: we will be pricing out some uncertainty, but also we

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00:24:24,840 --> 00:24:28,840
Speaker 8: need to price in the size of tariffs themselves and

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00:24:28,880 --> 00:24:33,200
Speaker 8: the impact of teriffs on the economy. We estimate the

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00:24:34,119 --> 00:24:38,159
Speaker 8: impact from tariffs on economic growth will be substantial, but

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00:24:38,240 --> 00:24:43,200
Speaker 8: at the same time, you know, uncertainty impact was also very,

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00:24:43,400 --> 00:24:47,639
Speaker 8: very sizable, and that's not going to be in the

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00:24:47,720 --> 00:24:50,920
Speaker 8: cards anymore, at least not to the same extent. So

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Speaker 8: I think there is a potential for some revival even

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Speaker 8: in you know, in the pace of payrolls going forward.

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Speaker 8: So you know, maybe the latest data reflects some of

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00:25:03,200 --> 00:25:07,080
Speaker 8: this uncertainty that we had early in the year, and

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00:25:07,280 --> 00:25:10,720
Speaker 8: companies can kind of start planning ahead with a little

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Speaker 8: bit more you know, precision.

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Speaker 1: And we certainly have seen that in the confidence data

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Speaker 1: just touch higher as people take a look at what

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Speaker 1: the landscape is right now. Jolina Sovietiva of the Conference Board,

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Speaker 1: thank you so much for being with us.

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00:25:28,080 --> 00:25:31,640
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00:25:31,720 --> 00:25:34,680
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00:25:34,760 --> 00:25:38,480
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