Chief Economist at Wolfe Research Stephanie Roth Talks November US CPI Report

Summary

Bloomberg Talks — Chief Economist at Wolfe Research Stephanie Roth Talks November US CPI Report

Date: December 18, 2025
Host: Paul Sweeney (with Tom Keene)
Guest: Stephanie Roth, Chief Economist, Wolfe Research
Topic: Analysis of the November 2025 US Consumer Price Index (CPI) Report

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Episode Overview

This episode centers on Stephanie Roth’s expert analysis of the surprise US November CPI inflation report. Roth discusses data quality issues, the impact of seasonal holiday factors, the state of labor markets, and implications for Fed policy. The conversation also briefly touches on prospective Federal Reserve appointments.

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Key Discussion Points & Insights

1. November CPI Report: A Surprising Print and Underlying Data Issues

• Main theme: The latest CPI came in weaker than expected, but Roth cautions against reading too much into it.

  • Roth warns of data distortions in the November print due to “a lot of error in this report.”
  • Holiday discounting is exaggerated in the numbers because the survey period was shifted later into the month when markdowns peak.
  • The Bureau of Labor Statistics (BLS) didn’t adjust seasonal factors, “so that automatically makes the data artificially weak,” notes Roth.
  • Prediction: Expect "a bounce back in December."
  • (00:50–01:16)

  “A key thing that there's an issue with...when they're sampling the data, specifically around November, that the survey period was condensed into later in the month when you typically have significant holiday discounting...the data [is] artificially weak.”
  — Stephanie Roth (00:50)

2. Inflation Trends and Fed Interpretation

• Despite the headline weakness, Roth suggests the real takeaway is that inflation isn’t rising.

  • Usual worries that tariffs would prevent holiday discounting didn’t materialize; 2025 saw normal seasonal markdowns. (01:20–01:41)
  • The idea of a disinflationary trend led by January data is likely overstated.
  • She expects inflation to "bounce back in the next couple of prints," and predicts the Fed will remain on hold “for much of the beginning of next year.” (02:25–02:39)

  “To form a strong conclusion about this print in particular as being some massive disinflationary period, I think is entirely inaccurate.” — Stephanie Roth (02:53)

3. The Labor Market: Resilient with Nuanced Data

• Employment numbers are better than surface impressions suggest:

  • Private payrolls are “actually quite decent” and indicate modest growth—around 70,000 jobs per month.
  • The uptick in unemployment isn’t as alarming, attributed in part to data quirks from the government shutdown and deferred resignation programs rather than true job losses.
  • The “headline jobs numbers are impacted...by not necessarily the government shutdown in particular, but the deferred resignation program which ended at the end of September.”
  • (03:51–04:38)

  “If you look at the private payroll numbers, they were actually quite decent. Now we're looking at a trend that's closer in the 70,000 range, which is really not bad.”
  — Stephanie Roth (04:20)

4. Sources of ‘Noise’ in the Inflation Data

• Airlines and Apparel were major contributors to weak inflation:
  • “Airlines fell 6.5% over two months...the core number was 0.1159 across both months. That’s, you know, quite low. Apparel was pretty weak. That is probably tied to this whole holiday discounting issue.” — Stephanie Roth (04:53–05:18)
  • Many service-sector categories (auto insurance, utility bills, medical bills) in the CPI remained “pretty flat” or “soft.”
  • “It's hard to know to what extent this is government shutdown related. My sense is it probably is and we'll see a bit of a bounce back.”
  • (06:12–06:24)

5. Implications for the Fed and Prospective Appointments

• Fed Policy: Roth expects the Fed not to overreact, reiterating her forecast for no immediate rate changes as more accurate data comes.
• On possible Fed appointments:
  • “I would love to see Waller. I think he'd be a great pick and I think markets would really prefer to see Waller...it’s probably more likely to be Hassett. Although...there seems to be some more concerns about Hassett or at least more hesitation out of the White House for picking him.”
  • (06:41–06:57)

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Notable Quotes & Memorable Moments

• On the utility of the CPI print:

  “There is a lot of error in this report. So I would not take much away from this.”
  — Stephanie Roth (00:50)

• On labor market resilience:

  “The unemployment rate rose [but] there was again some issues with the government shutdown impacting the data.”
  — Stephanie Roth (04:36)

• On Fed appointment preferences:

  “I would love to see Waller. I think he'd be a great pick and I think markets would really prefer to see Waller…”
  — Stephanie Roth (06:41)

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Timestamps for Important Segments

• 00:50 — Roth explains why the November CPI report is distorted by timing and seasonal factors.
• 01:32 — Discussion of expected holiday discounting and effect of tariffs.
• 02:25 — Debate over inflation trends and the Fed’s likely reaction.
• 03:51 — Analysis of labor market data and private payroll trends.
• 04:53 — Examination of inflation's key drivers: airlines and apparel.
• 06:12 — Service sector categories in the CPI.
• 06:41 — Preferences and predictions for the next Fed chair.

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Tone and Style

The discussion maintains a conversational, thoughtful, and analytical tone. Roth is concise and direct about the limitations of the current data, while the hosts probe for both nuance and actionable takeaways—balancing technical detail with practical policy implications.

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Summary

Stephanie Roth urges caution in interpreting the November 2025 CPI report, highlighting multiple sources of statistical noise and one-off effects. She sees no evidence for a major disinflationary trend, expects the labor market to remain steady based on private payrolls, and foresees the Fed holding rates steady while waiting for cleaner data. The episode closes with a brief, candid take on potential Fed leadership choices, underscoring the market’s preference for candidates deemed steady and credible.

Transcript

[Tom Keene]

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Bloomberg Audio Studios Podcasts Radio news Stephanie Roth.

[Paul Sweeney]

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 like nothing. What do you see over there in the terminal? Stephanie Roth of this inflation report? The shock.

[Stephanie Roth]

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 into later in the month when you typically have significant holiday discounting. And when we spoke with bls, 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.

[Tom Keene]

Is there a trend we can take away from here? That boy, it's at least inflation is not going up from here. Is that a fair takeaway? Maybe it's not cooling as much as these numbers might suggest, but it doesn't appear to be rising.

[Stephanie Roth]

I think that's entirely fair that 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 this holiday season, it showed a normal holiday discounting year. So it doesn't appear like there was this 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.

[Paul Sweeney]

So Myron's been out here, Governor Myron, we 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 mid summer?

[Stephanie Roth]

Yeah, I mean, so 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.

[Tom Keene]

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, we've got inflation?

[Stephanie Roth]

I sure hope not.

[Tom Keene]

You sure hope not because you think the data in the next couple of months could in fact show a little bit more inflation in the economy.

[Stephanie Roth]

Yeah. And we know that there was a, there was an issue. I mean, they didn't even collect 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.

[Paul Sweeney]

Stephanie Roth with us with Wolf Research. And we continue here, Paul Sweeney and Tom Keene with Lisa Matteo and John Tucker. Good morning across the Nation, Sirius XM channel 121. Good morning, Canada. I mentioned David Rosenberg up in Toronto with a disinflationary call. Nailed that into this report on YouTube. Subscribe to Bloomberg Podcast. We're thrilled to finish 2025 strong. Humbled by the signups there each and every day at Bloomberg Podcast, Paul Sweeney was Stephanie Roth.

[Tom Keene]

All right, so we've got an inflation environment that's at least okay at this point. About the labor market, what did you take away from some of the labor data earlier?

[Stephanie Roth]

Yeah, I mean, so I think what we're seeing is a labor 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 shutdown in particular, but the deferred resignation program which ended at the end of September. These were 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 a trend that's closer in the 70,000 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 shutdown impacting the data. And then in today's inflation data, the airlines were a big driver of the weakness. And there was also canceled flights. There was just a lot going on in the.

[Paul Sweeney]

So your first look at the noise is the airlines, first look at the.

[Stephanie Roth]

Noise is the airlines. They fell 6.5% over two months. So comes out to about 3% each month. If you look at the, you know, the core number was 0.1159 across both months. That's, you know, quite, quite low. Apparel 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. Part tied to the government shutdown and part tied to the fact that it's just a sort of less inflationary backdrop than that.

[Paul Sweeney]

So the Fed drives the market higher. Futures up 40 now up 47. Nasdaq up 1.3 half percent. The Nasdaq 100, I should say the VIX 16.83. 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, Fender and Smith. So an article that is just Merrill. I said it will never just be Merrill. Yeah, you just mentioned it. The pros like you look at each line item. What do the service sector line items say in the angst of affordability and purchasing power, Utility bills, medical bills, auto insurance. Can you see those in the report?

[Stephanie Roth]

Yeah, we can see that in the report. Motor vehicle insurance looks pretty flat. Transportation services, lodging, all of that stuff was pretty soft. It's hard to know to what extent this is government shutdown related. My sense is it probably is and we'll see a bit of a bounce back. And then on the good side, that was all pretty soft. Outside of maybe some used vehicles.

[Paul Sweeney]

Fed pick, what do you think?

[Stephanie Roth]

Who should it be or who do I think?

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Both.

[Paul Sweeney]

We have time for both answers.

[Stephanie Roth]

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 Hassett or at least more hesitation out of the White House for picking him.

[Paul Sweeney]

Stephanie Roth, thank you so much for joining us. Your commitment to surveillance is appreciated. Of course, with the Fed decides and other great moments.

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