Transcript
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Claudia Sam (0:31)
Bloomberg Audio Studios podcasts, Radio news
Tom Keene (0:36)
this is a joy. Claudia Sam with us. And it's not like the Fed day. We got to be adults. It's not the jobs day. Boring. Claudia is there a recession? What a Joy to have Dr. Sam with us here, chief economist, New Century Advisors today. I just heard back from Torsten Slack. One of the magic things that folks, as we go back and forth with our guests through the show, if I say something stupid, Neil Dutt is the first one to email in and just say, tom, you don't know what you're talking about. Carson Slott comes back on the price of beef. And Dr. Sam I did, I did a log chart of beef back to 1966. And the thing that is striking is the duration of the expensive cow that's out there. What is the duration, the X axis look like of our inflation we're living now? Hmm.
Claudia Sam (1:30)
Right. Well, I think, you know, what we've seen in recent years really going back to the pandemic is we've had a whole series of supply shocks of different kinds and some of them are very severe. In the pandemic, it had like echoes and it took, you know, several years to work its way through. I think if you look at beef prices, that's another one where the supply chain for beef prices, it takes a long time to make make more beef. Right. Like, so it just once you have a disruption, it's a very long tail to it as opposed to chickens, which have a shorter production cycle. Like we're learning so much and reminding so much about the physical nature of production. And so it's just one more supply shock. And frankly, as kind of came up at the press conference with Powell, you know, we've kind of had a run of bad luck in terms of one supply shock, cost shock after another. And that's kind of become the norm. And that's what we got to be prepared for. These shocks that do have sometimes some pretty long tails to them.
The Hartford Announcer (2:23)
Claudia, you have posts on LinkedIn recently how you say that the typical recession rules of thumb are no longer working. What do you mean by that?
Claudia Sam (2:33)
Right. So there's we, I think there's been a lot of discussion recently about, you know, what's a good payroll number, right. Like what's this break even rate and discussions about well, we've got a lot less labor supply out there. Immigration really took a step down. We've got an aging population. And so what we've seen since the beginning of 20, 25, 40% of the months we've had a decline in payrolls. That kind of pattern is something of a we're in a recession or the year after a recession. That's when you see those kind of pace. But actually right now that's a labor market that's doing pretty okay because the amount, the number of jobs the economy needs to create to keep up with the workers coming in is really low. It's practically close to zero. So that means in any month you've got weather, you've got some kind of shock. We just have some noise in the measurement, the data. We're going to this bumping around zero, some declines and positives. And so I think this is a normal we're in which normally should send off like recession is coming, we're in a recession. But that's not what this is. We are in a low growth type of economy. A lot of discussion already about in terms of payrolls. I think, you know, in a moment today where you get gdp, we got to understand that's going to start showing up in those GDP numbers too, right? Low is as good as it gets.