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Okay, this is important. We get some piece here on what really matters, which is the seventy percent of the American economy, the consumer. Dana Peterson joins own chief economists at the Conference Board and the Conference Board, I really I can't say enough about the heritage out of one of the really difficult times here. The Triangle shirtwais factory fire before World War One. It's a venerable organization and
they carry that with them each and every day. Dana, how is the Conference Board different from every other economic shop.
Well, we're different because we're non partisan. We don't have an ax to grind. We like to give people the facts and help them to understand it.
What do you understand now about the American consumer? The not exuberance, but the effervescence right now is tangible. Does it continue?
I think it does as long as consumers continue to work, And certainly, our own consumer confidence measures signals that consumers are saying that it's very easy to find a job right now and they expect that to be so in six months. So as long as consumers feel confident that they will be working, they're happy to spend, they're spending on good services, they're going on vacation.
So then why does it feel like too Americas the one you just describe. And there's a lot of angst out there from people saying it's not nearly as rosy as what Dana Peterson says.
Well, there's the other half of that coin, and that's inflation. While the pace of inflation has slowed significantly, prices are still a lot higher now than they were a pre pandemic. Inflation bites everyone, and that's what consumers are feeling. Yes, they have higher wages, they're taking home more money, but it's going back to the store in the form of inflation, and I think that's what's concerning many consumers.
Yeah, that's right, Dana. I think that's kind of what we hear from a lot of folks out there. Is there a time when that kind of plays out, when we stop saying, boy, my supermarket bill is a lot higher than it used to be, Because one could argue we're almost five years into the onset of the pandemic and the inflation resulting therefrom Is there a point where this becomes less of an issue for people?
I think once people get used to it. So for example, with the housing market, you know, there's a whole generation of folks who never owned a home and they don't remember three percent mortgages, and they're saying, well, I guess this is what the environment looks like. The mortgage is going to be five six percent, but I still don't want to buy that house, so they go for And that's what we're seeing more of people just kind of resigning themselves to this is the new normal.
And so, Dana, I mean, the labor market, you know, by all measures, is still very very strong, very vibrant. It seems like if people want a job, they can get a job. Wagers are rising now at a faster rate than inflation. How do you characterize the labor market these days?
I think the labor market's super robust. We're still seeing job gains. November was really outsized. Yes, we had a bit of a payback from the hurricane related weakness, but you know, again people are working. Many companies are still hiring or they're at least holding on to their workers. When we ask CEOs what they're planning to do, seventy five percent say we're going to hire or basically ward our labor force.
Frame out your real GDP twelve months out and overlay inflation to a nominal GDP number. What does the Conference sports see?
Well, four percent, so that'd be two percent GDP and then two percent inflation. So we hope that happens, although there are very many risks that could cause inflation to be higher than we exchect and also growth to be lower.
But is that your definition of a solid economy or I'm like, OMG, the COVID boom is over and we're slowing down.
Well, we've already kind of slowed down to I think what's a new normal. We'll probably get there next year with two percent growth. That's quite strong. The key thing is just keeping me unemployment right low.
Yeah. Is there a wealth affect Dana Peterson? I mean, are people looking at like Sweeney's looking at his Nvidia going You know, I can afford the sphere and the eagles because I'm large. Is there a wealth effect out there going on?
Well?
For those who own financial assets, yes, there is a wealth effect. If you own a home, your home home prices have almost doubled. If you own stocks, they continue to rise. The bond market it's in and out, but you know, things are I think, well for those who have assets, but for folks who don't have assets, they're probably not as excited, but still they may look at the strength of the stock market as an indicator that their job is going to be there and that they're going to prosper.
This is dead on. I can't what you just heard, folks from mss Peterson is so so important. We look at like the halves and they have nots, and we look at the paycheck, which makes sense, but there's also the halves and the have nots with assets and that's not nearly discussed as it should be. Dana Peterson, thank you so much, Chief Economist at the Conference Board,