Bloomberg Audio Studios, podcasts, radio news. Stephanie Roth walks in and it's really wicked cold in here, folks.
I like it that way, And the whole room heats up because she's working the terminal shure like nothing.
What do you see over there in the terminal, Stepphanie Ross? Oh, this inflation report? This shock?
I certainly, it certainly is a shock. I think the main thing that we have to remember is there is a lot of error in this report, so I would
not take much away from this. A key thing that there's an issue with in the sense that when they're sampling the data specifically around November, that the survey period was condensed until later in the month when you typically have significant holiday discounting, and when we spoke with BOS, they said they're not doing anything to adjust those seasonals, so that automatically makes the data artificially weak and we're probably going to see a bounce back in December.
Is there a trend wee can takeaway from here that, boy, it's at least inflation is not going up from here? Is that fair takeaway? Maybe it's not cooling as much as these numbers might suggest, but it doesn't appear to be rising.
I think that's entirely fair.
Okay.
There was this concern that around the holiday season companies wouldn't really do the typical discounting that they usually do because of the tariffs. That doesn't appear to be the case. And we knew this heading into the data print because if you looked at a number of different indicators that survey the company is ahead of the holiday season, it showed a normal holiday discounting year. So it doesn't appear like there was this, you know, lapse in discounting just
because of tariffs. In fact, it was a typical year for discounting. And then on top of that you have some of the issues within the data because of the government shutdown.
So Myron's been out here, Governor Myron, We've got a lower rates, a whole bunch of other people. There's been a clear tendency within Bloomberg's surveillance of people looking at a disinflationary tendency. Is it a January tendency or is it a FED meeting waiting out Midsummer?
Yeah, I mean, I think, I think, I think what we'll see is inflation will bounce back in the next couple of prints, the economy will start to pick up again, in which case the Fed's probably going to be on hold for much of the beginning of next year.
So again, so the Fed, I mean if you look at so you don't think the Fed's going to look at these numbers and say it.
We've got inflation.
I sure, hope not sure, because you think that data in the next couple of months could in fact show a little bit more inflation in the economy.
Yeah, And we know that there was a there was an issue. I mean, they didn't even collect in the October CPI for the most part. We know that there are issues with the data. So to form a strong conclusion about this print in particular as being some massive disinflationary period, I think is entirely inaccurate.
Sevening wrong through this with a Wolf Research and we continue here Paul Sweeney and Tom King with Lisa Matteo and John Tuckler.
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All Right, so we've got an inflation environment that's at least okay at this point.
How about the labor market.
What did you take away from some of the labor data earlier.
Yeah, I mean so, I think what we're seeing is a live market that's holding up a lot better and in fact starting to inflect a bit higher from here. And I think that's the main conclusion that we should take away from the headline jobs numbers. Let me replace it the private payrolls numbers. The headline jobs numbers are impacted again by not necessarily the government shut down in particular, but the the third resignation program which ended at the
end of September. These are people who took severance package. This is not people who lost their jobs. So if you look at the private payroll numbers, they were actually quite decent. Now we're looking at, you know, a trend that's close to in the seventy range, which is really not bad. So, and the effect the unemployment rate rose is less of a less of a concern. I think partially because there was again some issues with the government
shut down impacting the data. And then in today's inflation data, the airlines were a big driver of the weakness, and that there was also canceled flights. There was just a lot going on.
Uh in your first look at the noises the airlines.
First look at the noises the airlines. They fell six point five percent over two months, so it comes out to about three percent each month. Right if you look at the you know, the core number was point one nine across both months. That's you know, quite quite low. A pail was was pretty weak. That is probably tied
to this whole holiday discounting issue. So there's a lot of sort of noise within within within the report, and part tied to the government shutdown, and port tied to the fact that it's just a sort of less inflationary backdrop than the market.
Higher futures of forty now forty seven, nansdeck up one point three half percent, the nansdack one hundred, I should say, vict sixteen point eight three. You know, I look at this stuff, I look at the whole ballet of it all, and I am more than certain I learned this from David Rosenberg at Merrill years ago, Merrill Lynch, Pierce Fenner, and Smith. I saw an article that is just Meryl. I said, it will never just be maryl. You just mentioned that the pros like you look at each line item.
What do the service sector line items say and the angst of affoord to be in purchasing power, utility bills, medical bills, the auto insurance.
Can you see those in the report?
Yeah, we can see that in the report. Motor vehicle insurance looks pretty flat. Transportation services, lodging, all that stuff was pretty soft. It's hard to know to what extent this is government shutdown related. My senses, it probably is, and we'll see a bit of a bounce act. And then on the good side, that was all pretty soft, outside of maybe some used vehicles.
Fed pick. What do you think who.
Should it be? Or who do I think it will be?
We have time for both answers.
I would love to see Waller. I think he'd be a great pick, and I think markets would really prefer to see Waller, who I think is more likely. It's probably more likely to be Hassett, although it does seem like incrementally over the past couple of weeks, there seems to be some more concerns about Hasset, or at least more hesitation out of the White House right for picking him.
Stephanie Roth, thank you so much for joining us, your commitment to surveillances appreciated, of course. With the Fed decides and other great moments,