Sponsor Voice (1:52)

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Robert Smith (2:42)

Always good to remind everyone how this award show works. There are 12 regional banks in the Federal Reserve System. Well, Jay Powell already said all this, right? Yes. Each one studies their local economy, has their own section in the Beige Book. We give awards to the and across.

Darian Woods (2:57)

The most recent Beige Book there were reports of the consumer economy slowing. But we had to give a runner up award to the Kansas City Fed who gave some unusual advice.

Robert Smith (3:08)

I will read it. Quote, one firm remarked that now was the best time to get a tattoo as even top artists have more open appointments than usual. It's a real glass half full way of looking at a slowdown. At least there's no waiting line for tattoos.

Darian Woods (3:24)

We also wanted to give a runner up award to the Federal Reserve bank of Cleveland who pointed out that there was at least one industry that was booming, AI data centers.

Robert Smith (3:34)

But as they say in the Beige Book, quote, some described a collective holding of breath as these fast paced buildouts became a primary driver of demand.

Darian Woods (3:45)

A collective holding of breath. I love that line because it does seem like we're watching a bit of a high wire act with the AI buildout.

Robert Smith (3:53)

Yeah, we all hold our breath as we see AI doing flips and twirls and catches, all without a net.

Darian Woods (3:59)

All right, so now it's time for our big winner and it's a special one. The envelope please. The Beijing goes to the Richmond Fed.

Robert Smith (4:10)

We actually decided to give this award before the Beige Book came out as a sort of lifetime achievement award. I was traveling down to Richmond, Virginia to follow around the president of the Richmond Fed, Tom Barkin. And so I brought news that he had also won the beige. Congratulations, Tom.

Tom Barkin (4:27)

Thank you. I've been needing one for my desk.

Robert Smith (4:30)

Yeah, it's virtual but fair enough. Yeah.

Darian Woods (4:33)

So it doesn't add to your baggage travel allowance.

Robert Smith (4:36)

Yes, it was easy to bring. Tom Barkin won this special beige because he embodies the spirit of the Beige Book. He loves to travel around his district and get people's stories about the economy. When we talked to him on November 19, he he had already done about 150 live events this year with students, workers, business owners and he loves to ask these big open ended questions.

Tom Barkin (4:59)

We know we're in this low hire, low fire environment. Why aren't they hiring? What's stopping them? Demand's good. Why aren't you hiring? So I'm always trying to sort that out. Layoffs. One thing that's true about layoffs is you don't just wake up in the morning and do them, you have to plan them. So I'm trying to ask the big companies I talk to, are you Planning any. When are they coming? What would you think? Because I'm trying to get ahead of the data. I'm trying to understand the nuance. I'm trying to get my mind around the turning points.

Robert Smith (5:28)

I followed Tom to one of his events at a ballroom at the University of Richmond, the quarterly luncheon of the Virginia CEOs Group. There are some fancy bigwigs here, but I spot a guy dressed in more casual work gear.

Scott Turner (5:42)

My name is Scott Turner. I'm the founder of True Timber Arborists and Riverside Outfitters here in Richmond, Virginia.

Robert Smith (5:47)

I have to say I picked you out because in a room full of suits, you're wearing red plaid.

Scott Turner (5:53)

That's right. One of the reasons I chose my profession was so I could keep dressing up like a little kid and not, you know, wear the monkey suits.

Robert Smith (6:01)

Scott's company trims trees and takes tourists on rafts down the James River. It's as fun as it sounds like, and in fact, like a lot of people here. He says his business is doing just fine. But he worries mostly because everyone else is worried.

Scott Turner (6:16)

Just general uncertainty that people feel around. Should I be holding some money in my pocket? You know, a little doomsday feeling around what our politics and what our government is doing, that makes people maybe a little tighter with keeping some money in the mattress.

Robert Smith (6:32)

The president of the Richmond Fed, Tom Barkin, gets to the event early. He stays late, shakes hands, asks questions. How do you set your prices? He asks. How do you know when you can raise prices and when the lunch gets served? Barkin takes the stage and basically reflects back what he's been hearing.

Tom Barkin (6:48)

I will say, in our outreach, the feel is extraordinarily different by sector. If you build data centers or you provide energy or you sell to higher income consumers, or you trade in Wall street or you build pharmaceutical plants, then your economy is hot. But if you're a farmer or a realtor or a manufacturer hurt by tariffs or you're dependent on lower income consumers, then you're struggling.

Robert Smith (7:13)

When it's time for questions, the tree trimmer in the red plaid jacket stands up. Scott Turner says he's worried about the young people with college degrees not finding jobs. He says he offers jobs to a lot of college graduates, even if they don't actually need all of that book learning.

Scott Turner (7:27)

I mean, I have a great job offering, but you didn't have to invest 200,000 in an education to get my job offering. What does that do to everybody if the students stop finding placement?

Robert Smith (7:37)

Tom Barkin answers that it is a real challenge balancing the right kind of training with the right kind of jobs that are actually out there.

Tom Barkin (7:45)

I was in Hickory, North Carolina. I did a session with a bunch of furniture manufacturers and they were complaining about their lack of people. And then I did a session with a bunch of students at a community college and I asked why they didn't go into furniture manufacturing and they said my dad was in furniture manufacturing. He got laid off. Why would I want to go there?

Robert Smith (8:04)

Tom says you have to look at providing incentives for blue collar training that make sure that they can not just get well paying jobs now but have a whole lifetime career. It's an interesting give and take. During the luncheon, Tom Barkin doesn't try to predict the future. People don't actually demand inside info from him. Everyone is just listening to what everyone else is going through. It's kind of like economic therapy. And Tom Market doesn't make any broad conclusions from what he hears. He says the mood is different in bigger growing cities like Richmond than it is in small towns. He hears different complaints in red states and blue states. He may talk to hundreds of people in his travels, but the Beige Book teams talk to thousands to put together the book. Next week when he travels to Washington D.C. for the meeting of the Federal Reserve, he'll bring some of these stories with him and and they do make their way into the conversation.

Tom Barkin (8:55)

A single anecdote is interesting, sometimes amusing if you read the transcripts, but it doesn't drive my colleagues to have different policy views. But I think if you've invested in a serious way over a bunch of time and proven that you could bring advantage insights coming out of what you've learned, not from a story about one restaurateur, but from a synthesis or conclusions out of what you're learning. I think people will listen to that.

Robert Smith (9:21)

Congratulations again to the Richmond Fed for the special Beijing Award in December.

Darian Woods (9:27)

And now that the government is open and producing data again, maybe the Beige Book will return to its place of obscurity just for those like us, Robert, who are in the know.

Darian Woods (9:40)

This episode was produced by Cooper Gaspim with engineering by Sophie MacArthur. It was fact checked by Tyler Jones. Cake and Cannon edits the show and the indicator is a production of npr.

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Sponsor Voice (10:24)

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