Moody's Talks - Inside Economics - August Jobs: Pretty Good

Episode Date: September 6, 2024

The Inside Economics crew gathers in Southern California for an early morning reaction to the August jobs report, which they all concur is “pretty good”. They discuss the implications of slowing job growth for the Fed’s upcoming meetings as well as the presidential election. Finally, they all give their odds for a recession occurring in the next year—Cris remains the bear of the group. Guest: Dante DeAntonio - Senior Director, Economic ResearchHosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, and Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s AnalyticsFollow Mark Zandi on 'X' @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Zandi, the chief economist, the Moody's Analytics. I'm joined by a few of my trusty friends, co-host, colleagues. I see Chris out there, Chris DeReedies. Hi, Chris. Hey, Mark.

I see Marissa, Marissa D. Natale. Hi, Marissa. Hi, Marcia. Hi, Mark. And Dr. Di Antonio, Dante De Antonio. Good to see you. Good to see you, too, Mark. Are we all in Southern California,

in one part of California or another? We're all down here, right? You guys haven't been back. Yeah. Yeah. Well, we were here for our conference, our LA conference, which I don't know. I'd say thumbs up, right? Double thumbs up.

Yeah. How Dante do in that debate with him, Chris? Because you had the productivity debate. You're the bull. He's the bear. You know, he drew the short straw. So it's tough. I keep losing because you're your forecast's too optimistic.

So I lose by design, you know. Well, the numbers are getting pretty tough to deny the, productivity growth numbers. Speaking of which, the jobs numbers, this is Friday, early Friday morning, at least early here on the West Coast. Not early for you, Mercer. This is like, this is the norm. How do you guys like this? That's not bad. It's not bad. Okay. Right, Chris. Once a year. Once a year, it's fine. Once a year, it's fine. All right. Well, we got the job numbers. And Dante, I'm going to turn to you. You want to give us a rundown?

Sure. I would say things were pretty good. I think, you know, top line job growth number, maybe not quite as strong as some people were hoping for, 142,000 jobs added in August. I think on the more plus side of things, the unemployment rate did tick back down a little bit, which I think hopefully should alleviate some concerns amongst people

that we were going to just see the unemployment rate continue to creep higher. In terms of industry employment, not a whole lot of surprises, maybe manufacturing. The biggest surprise was down 24,000 in August. It's surprising in that that's a big loss relative to what it's been doing, although it's not all that surprising given the sort of all the other week data around manufacturing that we've had over the last two years.

Other declines, retail had a small decline. Temp help services continues to decline, but no real big surprise there. Healthcare grew, but was a bit weaker than it's been in. recent months. So you're curious if that's the start of a new trend or just a one month sort of anomaly. Leisure and hospitality, out of 46,000 jobs, strongest growing industry in August, which was good to see the public sector still had a nice job gain at 24,000. So I would say, you know, job growth was still fairly well distributed. I don't know. It made me feel okay. You know, I don't feel great about it, but I don't feel bad about it. It's kind of down the middle for me. two statistics, one positive, one more negative, you get your take. The first is the negative statistic, and that's the revisions. There were downward revisions to the estimated payroll employment gains in the previous two months that they were consequential, right? They, I think, a total, I mean, I looked at it quickly, I think in total close to, what, 60,000 in total?

Yeah. Something like that. And it looks like on a three, over the past, three months through August, we're now seeing average monthly job growth of closer to 100K, right? Something like that. Not too far off. 115, yeah. 150. So, okay, what do you make of that? The revision should be worried, not worried? I'm not particularly worried. I think, you know, if you look back six months ago, we sort of expected that job growth would be at or even below 100,000 by now, and that sort of got delayed a little bit by stronger labor force growth. I mean, the fact that we're,

seemingly headed towards job growth of 100,000 doesn't seem to worry me all that much, knowing that we've got rate cuts coming here quickly and I think things should hopefully stabilize where they are. But I'm curious if anyone else is feeling more pessimistic about it. I'll go around the horn. I'm still working on you, Dante. All right, that's fine. I need to flesh out your views on this thing.

All right. So it's pretty good. It's a little wishy-washy in my mind, the whole pretty good thing. Okay. But I thought you were going to mention, maybe this is, I got this wrong, but I thought August always, the payroll numbers in August always tend to come in at least first print, which is what we got today on the soft side, right? Kind of in my thinking about this, that the response rates, they tend to be lower, at least initially, because maybe people are on vacation in a way. and as the response rates, as people respond later, we get upward revision. So if history is a guide, you know, next month or the month after, and we take a look at the data,

we might see an upward revision to August. Does that, does that, do I have that right? Yeah, I've got some stats for you, if you want. You know, since, since 2019 of the 24 years, the August number has been revised higher, which is obviously an unusual, normally low response rate should generate, you know, more sort of even pattern of revisions up and down, but for some reason in August, we tend to always get these upward revisions. The average upward revision between the first print and the third print is just over 60,000 in that period. So it's not an insignificant revision. I will say the

last two years have actually been small downward revisions in August. So maybe there's some chance that that pattern is shifting a little bit. But if you look over a longer time period, it definitely would expect to see an upward revision over the next couple of months. Okay. All right. So adding to pretty good narrative. On the upside, the statistic you didn't mention, or I might have missed it, was hours worked per week, which has been a week. It has been, I think, I don't know where we are today, but last month, I think we were at a level that was below pre-pandemic.

And ours worked had been steadily coming down. And just, you know, to make this clear. hours tend to be kind of a leading indicator of jobs. So businesses will cut back hours or add to hours of their existing workforce before they actually add or cut labor force. And the fact that that ticked up, that was a positive. A big positive, small positive, something we should. I think small positive.

I mean, I didn't read too much. It did tick down last month and sort of reverse that decline this month. I mean, I didn't read too much. It's been relatively low here in recent months. And I think the, you know, one-tenth movement in either direction shouldn't get us too concerned at any given point. I mean, it's good to see that it came back up. I think that's a positive sign, but it wasn't too concerned. Okay.

All right. So pretty good. Pretty good. Okay. Marissa, what do you think? Pretty good. Yeah. I mean, it seems like there was perhaps some bounce back from the hurricane effect we saw in the report for July.

That could partially explain the big increase in. construction employment, perhaps over the month. And we did see that the number of people that were on temporary layoff fell on the household survey side, which explained some of the downward movement in the unemployment rate. I mean, you definitely see some weakness in here. Like, for example, the number of people working part-time for economic reasons was up, and it's up pretty significantly over the year. And mostly because people said, their employers are cutting back hours because of slack in the business. So it's okay.

I think underlying job growth is somewhere probably between the July and August read. So I would say it's a bit over $100,000 a month, maybe $120,000 a month if you account for the weakness in July due to the hurricane and then some bounce back in August. And then, yeah, I think on the industry side, we look at the establishment survey, you definitely see, like we saw another straight month of very weak numbers for professional business services, which is a very large, right, white collar industry. And that was not only in temp help, but kind of across the board

in professional business services. So most of the gain has come from leisure hospitality and health care last month and everything else was very weak. But it's not particularly worrying to me. I mean, the diffusion index, if you remember, we talked about that last month because it had fallen below 50, it's back up above 50. If you look at the private industry diffusion index. So that's the share of all of these industries on the payroll survey side, the share of industries that are either adding to payrolls or keeping them steady. And typically when that falls below 50, that's been a pretty reliable. indicator of recession. If it stays there for consecutive months, it had fallen below 50 in July,

but it popped back up in August. So pretty good. Let me ask you this, though. You can you said underlying job growth is between 100 and 150K per month. So when you say underlying, you mean abstracting from the vagaries of the data or events like the hurricane that blew through Yeah. Disrupted things for a bit. Yeah. And historically, if you said 150K, you'd say pretty good that would be you would describe it. And that's the way you're describing it.

But is that appropriate in the context of all the labor force growth we think we're getting? I mean, it's not sure. I know the labor force growth is kind of 150K in the household survey, the survey of households. But we know that that, or we think we know that that's understating the. case because of all of the immigration that's happening and those immigrants are applying for work and they're getting work and adding to the labor force. So if that were the case, it would suggest that $100, $150K may not be pretty good. It's not good enough. You know, you need something more than that to ensure that unemployment doesn't keep on moving higher here. So how do you think about that?

Yeah, I mean, I think that as we move through this, I think you're, you're, you're, You're right, but I think as we move through the year now that the border is shut down basically since June, that immigration effect on the labor force will fade. So I think it's still happening. But I think it's less so than it was, say, a year ago when we had hundreds of thousands of people coming across the border every month. So now that that is not the case, that entrance into the labor force should be trickling off here month after month. Okay, so you're saying, okay, underlying job growth, payroll job growth is 100, 150K per month. That may be a little on the soft side compared to where you'd like to see it at the moment, given the strong immigration. But we do know that the number of immigrants coming across the border has slowed sharply since President Biden's executive order.

And that's going to start showing up in much slower labor force growth, more consistent with the 150K. So we're good, pretty good, good to pretty good. Yep. Yep, I think that summarizes it. Okay, good, good. Chris, what do you think? I'd say the report was largely expected, but that doesn't mean it makes me feel comfortable.

I think there are signs of weakness there that Marissa highlighted. I also looked at the number of people with multiple jobs that ticked up pretty substantial, about half a million or so. So all signs of weakening in the job market. So again, we're at that point in the landing where it's, you know, seems to be going right, but like a gust of wind and you're off course once again. So I'm not saying you should be nervous, but, you know, it's not terribly comfortable either.

Yeah, so I don't look, I haven't looked at the multiple job holders. Can you just give us a sense of what's happening there? what is that in what's happening you know what's the trend lines here on that yeah so it's an indication of people who hold more than one job they have made a full-time job and a part-time job or two-part-time jobs so yeah an indication broadly speaking of people trying to piece together a full work week or you know certainly trying to supplement their income with additional jobs because their primary job is insufficient so i see that as a measure of a weakness, right? If your primary job isn't doing enough for you, you can't get enough hours,

you have to take the second job. So seeing that tick up, again, it's not falling off a cliff. It's not suggesting that everyone is rushing out to get another job. But it's a sign of some weakness. And when you combine it with the other ones that Marissa mentioned, like the broader measures of unemployment ticking up, you know, it's an indication. that things are not as robust as maybe they were a year or so ago. Do you know as a share of jobs, what is multiple job holders? It's moving up, but is it high relative to the historical standard? It's about 5.1%.

I think that actually is kind of in line. I don't think that's in line. Nothing unusual. It's just been moving up to your point. That's right. Trend line. Yeah. That's the issue.

I mean, if you take the trend line and extrapolate that forward, you go, oh, that could be a problem. The plane's not going to land because things are slowing it. They continue to slow. At some point, you've got a problem. And that's what you're saying. You're worried that those trend lines don't start to kind of level off here. That's exactly right. It's that point of inflection that makes you nervous, right?

Yeah, but why would? I mean, what would be kind of the fundamental reason why those trends lines won't stabilize? Why will they keep slowing? What's the logic or intuition behind why they would continue to slow? That there's some momentum here, or that there are some lags that we're not fully capturing in the data, right? Or unable to see? I think that's some of the noise that we're seeing. The revisions that we mentioned, they're not inconsequential.

So they are indicating, hey, things are not quite as rosy as the first print suggested. So the underlying fundamentals may be weaker. The consumer maybe is indicating some weakness going forward, and that would translate into softer job growth in the future. But of course, if we are soft landing, this is exactly what you would see. This is exactly a soft landing, right? Well, that's the paradox. right at this point it's exactly you know the soft landing and the hard landing kind of look the same look the

same uh and now it's you know what's is that gonna is the curve going to hold or is it going to continue to to you know trend downward quick or even accelerate right that's the that's the uncomfortable feelings right but you say the odds are we're soft landing but nonetheless you know we're coming in and we'll see how this plays out yeah that's right that's right that got us to wind, who knows, you know, that we could get a gust of wind, which means couldn't predict that. That was coming from someplace we, you know, had no idea. That's right. And the instrumentation's a little, you know, faulty there.

Yeah, yeah. Yeah, given all the revisions. Right. Yeah. Okay. Well, what about average, how are the earnings? Do you have any reaction that came in strong month to month? I thought three, was it 3.8% I heard year over a year?

Yeah, year over year. That's right. It was 0.4 on the month, though. Yeah. 3.8. 3.8 is fine, right? Yeah. I mean, you know, that's exactly, given you're the productivity bowl.

Yeah, yeah. We've got all this productivity growth with 2% inflation, 3.8 seems perfectly reasonable to me. I mean, you know. Yeah, it's the 0.4. Yeah. But again, it's a single month. It's a single month. Is it affected by hours work and mix.

and so, oh, I don't, I'm not worried about it at all. I characterize it as pretty good, the report. I thought, you know, I'm not sure what I would have wanted to see, maybe others than the revisions, I guess. You know, if there were no revisions, downward revisions, I'd say, picture perfect, kind of right where you'd want it. I mean, underlying job growth, 150, 150K, claimant 4.2%, you know, it took up an hour's work. The wage growth numbers were pretty good. The

diffusion index. I don't know. That seems like you can't ask for much better than that. I mean, and, you know, these job reports, you get, you never get a perfect, a picture perfect job report. I mean, it's rare. You might get one every, you have a siting once every three years or something, where it's completely clear that this is a good jobs report. But, But it wasn't that, but I thought it was pretty good. Yeah, pretty good. How about the market reaction? Chris, have you been following?

What's the, how the stock market and bond market are digesting all this? Yeah, stock market, I think, was pretty fairly tame. I don't know if there was any update in the last few minutes here. Yeah, it's kind of flattish. And then Fed Fut futures that bounced around a little bit. I think we had, last I checked, a little bit more weight on a 50, basis point cut for September now. But I think it's like a 60, 40 split.

So not, again, overly confident that the Fed is going 50. And you always have to be conscious of the initial reaction here. There's a lot of volatility once the number comes out. So I suspect that 25 is still in play. I think that is the route the Fed will take. starting the market is front running that. I think if you look further out by the end of the year, market is predicting 100, 125 basis points in cuts.

So whether that's whatever combination of 25 and 50 basis point cuts we get over the next three meetings, we're still planning on a pretty significant reduction. So the stock market kind of no big change here. Shook it off, yeah. Okay. And the futures, the Fed futures are saying a little bit more weight on a half a point cut in the funds rate when the Fed meets next week as opposed to a quarter point cut. Correct. And the 10-year treasury yield, anyone look at that?

Is that, let's kind of look at that as my bellwether. Yeah, it's flat. It's down a little bit, right? The yield is down a little bit? It's pretty flat, right? It's flat, pretty flat. Yeah. I guess the news.

there is that the difference between the 10 year and the two year is now positive. Oh, is that right? By two, three basis points. But it is uninverting, which makes it, again, that dangerous time, perhaps. Dangerous because times pass when the curve, the curve becomes inverted, short rates rise above long. That's a long, that's a leading, historically a leading indicator of recession. but the next step is the curve actually becomes positively slow before you go into recession. That's what you mean.

That's right. So here we are. It's actually now gone positive. So history would say, boom, recession. Yeah. Well, there's some exceptions there. But, yeah. Oh, are there some exceptions?

There's a dangerous, well, the other soft landing, right? I think in the 90s, right? We had a same deal. Same deal. But we soft landed. We soft landed. Yeah. Okay. So, you know, the one thing I'm having a hard time getting my mind around when it comes to the market expectations that investors thinking about the Fed is these very dramatic rate cuts. I mean, 50 basis points. That's the majority of investors are saying 50 basis points for the September meeting. And then very aggressive rate cutting after that, getting the funds rate down very quickly. What do you say?

suppose is going on there? Do you have a view, Mercer on that? It seems like the bond market is more worried than we are about the pace of slowing in the job market. I don't know. I don't know. I don't know why that is, but that's what I infer from these expectations of much bigger and faster cuts here. Like they assume the Fed is going to try to get back down to a neutral rate very quickly, right, instead of taking their time. So maybe they're more spooked by these jobs reports and the upcoming revisions than we are. Yeah. Is that, Dante, your interpretation as well? I mean, is there any explanation for why this is the case? Why ostensibly bond investors are more spooked about what's going on here? Nothing that immediately comes to mind. I mean,

It just seems like you've got to be more worried or you're anticipating that a recession is coming. I mean, that's historically, you know, we saw that earlier this cycle where there was a big expectation of rates to decline, but it was likely just that you had an increasing share of investors who thought a recession was dead ahead. And so they were expecting, obviously, huge cuts. And then you had another group that was expecting no cuts because they weren't expecting recession. So it could be some of that divergence and sort of what the view is of the economy moving forward

and how the Fed will obviously react in a different way, if that's the case. Chris, any theories? I think investors have bought into this idea that inflation is licked and, you know, that's no longer an issue and time to get, move on away from the restrictive policy. Right, right. Could it be the case, I'm thinking out loud, that there is the distribution of possible outcomes here in the minds of bond investors. isn't kind of this normal distribution. It's kind of they've got this fat tail where they're attaching, investors are attaching a, you know, unusually high probability that something can

really go off the rails here. You know, some, something's going to come in and knock us off and, you know, pushes into recession, some dark scenarios. And if you attach a much higher weight on those tail kind of scenarios, you could get this result in the futures market. Does that, does that make sense? Is that a possibility? Chris?

I think so. Yeah, you always have to be cautious when you look at those Fed futures because it's not just a bet, a one single point bet in the distribution to your point. It's reduced for risk management, right? So from that standpoint, there's a distribution of outcomes. And yeah, if the tail is a bit higher for recession risks, then that's going to push more weight on those lower rates. Yeah. I mean, that's hard for me to believe. I mean, that feels more right to me than the explanation that bond investors are just more pessimistic than we are. I mean, I don't know. I don't know why they would be more pessimistic, but I'm confused by, a little bit confused by why they think it's going to happen so fast here. You know, because in my thinking is that two reasons why the Fed's going to go more slowly here. One is, and by the way, don't give me

wrong. I would have no problem if they cut more quickly. That would be okay in my book. I think they've been, you know, obviously keeping rates too high for too long and they should get moving here. And I'm all on board with, with them cutting rates quickly. But two reasons why they might go more slowly. You know, one is why should they? You know, the economy is kind of doing what they wanted to do. Inflation kind of back in the bottle. No real pressure to go more quickly. I mean, that generally the Fed won't cut rates 50 basis points or more than a quarter point unless there's something really going off the rail somewhere and nothing's going off the rails anywhere. The second reason is the equilibrium rate is that that's the rate at which policy, monetary

policies, need of restraining or supporting growth feels, it's always, we don't ever know what it is. There's no, nothing etched in a stone somewhere saying that's what the equilibrium rate is. It's an empirical question. And the equilibrium rate will vary over time, given circumstances, and it's probably a lot higher right now that has been historically. But there seems to be a lot more uncertainty with regard to what that equilibrium rate is. And if you're uncertain, in this case, I think you just go more slowly. You just kind of lower rates in a more systematic, consistent way and not dramatically, because

again, you don't know where equilibrium is. Does that resonate with you, Chris? Yeah, I think it does. right okay okay all right what does this all mean for the presidential election i mean that's the other question on my mind uh i don't know how dante do you have a view on that what do you think is this going to favor one candidate over the other i mean it feels to me at this point like if things if this status quo holds that favors harris in my mind you know it seems like if things start to go off the rails that that's more in trump's we

House to lay blame at the feet of the Biden administration and, you know, stake a claim that we need change and we need something else to happen. Whereas if the economy sort of holds up and gets through this, it sort of, I think, solidifies the Harris position a little bit more that things have been fine. We've dealt with inflation. The policies that have been in place have worked and not sort of contributed to that. So it feels to me like if this holds out for another two months, that that's a positive for Harris. But, Dante, you're thinking. that your sense is that generally this is a plus for Harris over Trump because it shows the labor market is hanging tough that we are soft landings. You can point to the low unemployment rate,

the job growth, and that should favor her. I think so, yeah. Yeah. Mercer, what do you think? Yeah, I mean, I'd be more worried about what the next couple of CPI reports look like. Like if the job market stays like this, I think it's fine. I think people are really focused on inflation and that's been most of the talk around the economy with regard to the candidates. So I think as long as you don't see an uptick in inflation over the next few months, I think that favors her. Yeah. Okay. And Chris, what do you think? Yeah, same. I think the focus is on prices more than labor market, as long as it remains positive. Even if it's slowing, I don't think that's really a fodder for a really aggressive political attack.

Yeah, I think all the data favor Harris. If you look at our presidential election model, we have a model that predicts who's going to be the next president based on a bunch of political and economic factors. That all points increasingly points to Harris. There are three key economic variables in the model. One is gas prices and the cost of a gallon of regular. unleaded and according to our Pennsylvania Wawa not I was looking at California gas prices don't they are wow a whole other world out here another world yeah but I in our local Wawa back in PA it's three buck 30 and that's moving south I mean we saw oil prices they're they're back down I think I saw

West Texas Intermediate down below $70 a barrel which is pretty low it could probably consistent with $3 a gallon for regular unleaded and three buck 50 is kind of a threshold. Anything above 350, people start to take notice of that and gets into the media and probably would favor former President Trump. Anything south of 350 closer to three, which it seems like where we're headed here, that would definitively favor Harris. The other is the 30-year fixed mortgage rate goes to housing affordability. And right now, Chris, I think we're at 6.3, aren't we? Or something like that on the third year. 635.

635. The threshold there is something closer to 7% would favor Trump, anything south of 6.5 headed towards 6, which is what it feels like we're doing here, given what's going on in the bond market and Fed Expectations. That favors Harris. And then the third is real household income, real meaning after inflation. And given today's job numbers, if you, you know, add up the jobs, add up the hours, because hours were up, if you add up the wage growth, that, you know, that picked up a little bit, that means more income. And, you know, as you point out, if inflation remains tame, which feels like it will, particularly given the gasoline prices, then that would argue because diesel prices are also down. And diesel goes into food and grocery prices.

and that's really key to how people are thinking about inflation. So all that, if you do the calculation there in your mind, that comes up with real incomes that are growing pretty strongly, which favors Harris. So our model is now saying that she's going to win with, I think I missed Brendan and Justin's presentation yesterday at the conference on this, but I think we're around 280, 285 electoral votes,

and she needs 270 to win. And so the economic data seems to be a tailwind behind her. Agreed? Everyone on board with that? Yeah. Yeah. Okay. So we're going to, this is going to be a short podcast because we're all in L.A.

And we all got to get somewhere. So we've got to catch planes. So we're not going to go on. But I'm going to let's end the conversation with, you know, probabilities of recession. We haven't done this in a while. So what's the probability economy is going to enter into a recession? let's say between now and the end of 2025. And give me the odds and let me know if it's changed from the last time we had the guy.

I can't quite remember what everyone's odds were. But if it changed, let me know. So let me begin with you, Dante. What are the odds of recession between now and the end of next year, starting between now and the end of next year? So I think this is unchanged. I think 25% is basically where I'm at right now. I think, you know, they're still slightly elevated, but I don't feel any worse today than I did a month. or two ago. Okay, 25. Mercer? Yeah, 25 for me. 25 for you? Yeah. Has that changed?

I don't remember what I said last time. You went up. I might have been higher. Yeah, I might have been a little more spooked by that benchmark revision. Yeah, 25. 25. 25. Okay. And Chris, I'm sticking with a third, 33%. Really? Are you really that high? Yeah, yeah. It's the most dangerous time in the economy, right? Again, back to the soft landing metaphor. Yeah. I think I'm going to go, I'm going to go down 20 percent back down again. I think I was at 20. I went to 25. And now I'm feeling pretty good. I'm going to go back down to 20. That's that California weather. Is that what it is? It's feeling good. And a great conference.

Pretty good. Yeah, it was a great conference. It was a great conference. Okay, anything else, guys, before we call it a podcast? This may be a record short podcast. I'm not sure. Typically, it's probably more, it's double this length, but... I'll just say one more thing. I mean, I think some of the other labor market data that came out this week also makes me feel a little better, right?

So jobless claims fell. We got the joltz data, hiring ticked up a little bit. So it kind of just shows this slower. but okay job market. Nothing is cratering here. So all of that together makes me feel better about it. Yeah, and I guess it's the unemployment insurance claims that we're most focused on in terms of whether we're soft landing or not, whether the job market's holding together or not.

Anything else, Dante? Chris? Nothing? Okay. I think we're going to call this a podcast. Thanks, everyone. Talk to you next week. Take care now.