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News, and the economics of the moment. Tiffany Wilding joins from the Pacific Investment Management Company PIMCO, where she is a Managing Director Economist North America. At Tiffany, I know you have to wait and dive into the data or the media frenzy here at eight thirty four is unfair to you. But the feeling I get here is trend based disinflation. Am I off the mark?
Yeah? I mean, you know what I would just say, taking a step back when you look at a wide range of data, is it is getting back to you know, some semblance of pre pandemic. You know, you look at headline inflation levels. There were some stickier pieces of underlying inflation. But now that labor market adjustment looks like it's happening more fully. You know, those pieces of stickier inflation, we'll
be trending back to target. And so when you kind of look around the economy, things look, you know, like they're getting back to some semblance of normal after the unique set of shocks that we had post pandemic. And I think the thing that's you know, not as normal that really stands out obviously is the policy rate, you know, and obviously Federal Reserve officials understand that Powe was very clear at Jackson Hole that they are going to start that journey back to normal or at least kind of
what they think could be normal. And you know, and the pace of that is really going to depend on on the data from here. And you know, if we see economic weakness, then then they'll go faster.
Tiffany, I really appreciate that. I'm kind of situating it in this in this moment of the way that we had Brian Levitt doing it at Katie Kaminsky earlier in the show. This this notion that there has been this kind of post pandemic readjustment that might not be as notable or as noticeable as the kind of initial adjustment
that we had. Where are we in this cycle as you see it, when you look at what we're getting in terms of inflation data, pulling back more broadly to look at labor data as well, give us a sense of where this economy is as you see in.
Yeah, well, I mean I think I think the labor market data has has been you know, sort of confusing, if you will. The usual signs in the labor market of an underlying economy that's not doing well. The unemployment rate rising, I think is a bit of you have to, you know, kind of dig into the drivers of that indicator, because if you just looked at the labor market and you looked at nothing else, you would be incredibly worried
about a recession. But if you look at a broader range of indicators of the economy, it looks like it's doing okay. Right, It's a soft landing if anything. Uh, you know, the activity data, the growth data, the GDP data have been coming in better than expected. So I think you have to, you know, kind of take a step back and you know, just again understand that there's been a unique set of shocks since the pandemic. It's
made indicators, usual economic indicators, more difficult to read. And I think the unemployment rate right now is one of those things, I mean.
Difficult to read. I'm sorry. At a three percent real GDP ending June thirty, I got a five and a half percent amateurs look at nominal GDP led by Newport Beach, California. I mean, Tiffany, we've been wrong, wrong, wrong, on the resilience and spirit of America, when you sit with cynics like Jerome Schneider and the other animals at PIMCOH are you trying to tell them it's not as bad out there as you think?
His words, not yours.
Yeah, I mean, I think the you know, I guess the point that I would just really emphasize is that, you know, when you look at the labor market, the things that have driven the unemployment rate higher this time is more about labor supply. Obviously, over the last few years we've gotten a surge of immigration, and that has resulted in a higher unemployment rate. Because you just have more people in the labor force, you're not actually seeing layoffs. Now.
Certainly we could start to see more material layoffs across the economy, but you know, I would just say, overall, you know, the things still appear relatively strong, and usually when you have labor supply gains, you know, that's actually good for the economy. More people are consuming, more people are working. It's not usually the time where you're going into recession.
Tiffany Martin, thank you so much, greatly appreciate it. This morning here