Moody's Talks - Inside Economics - Consumer Sentiment and Sentimental Farewell

Episode Date: October 21, 2022

On Ryan's final episode of Inside Economics, John Leer, Chief Economist of Morning Consult, joins the podcast to discuss the state of the economy, consumer sentiment, inflation expectations, and the potential early signs of a wage-price spiral. Full episode transcript.Follow Mark Zandi @MarkZandi, Ryan Sweet @RealTime_Econ and Cris deRitis @MiddleWayEcon for additional insight. 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 Sandy, the chief economist of Moody's Analytics, and I'm joined by my two co-hosts, Ryan, Ryan Sweet. Ryan's the director of real-time economics, and Chris, Chris DeReedy's, the Deputy Chief of Connesty. Well, guys, I'm back in the U.S. of A. And I'll have to tell you. I'm very happy to be back. Well, that was quite the voyage. That was.

Yeah. Do you count up the number of miles you flew? A lot of miles. I literally circumnavigated the globe. I did. And actually last night, I got back last Saturday. Last night was the first night that I actually slept eight hours. You know, when I first got back, I was getting up at three in the morning, then four in the

morning, then five in the morning. Finally, six in the morning and eight hours because I went to bed at ten. And Chris, he's laying the groundwork so he can say he's tired. No, I actually feel very good. All right. I feel energized. I feel really today's Friday. That's a good, good thing too.

Now that you're back in the U.S., trouble always follows you. It does. Your recession odds must now have been higher now that you're back. No, did you look to the stock markets today? What's going on? Lots of green. Yeah, stock market. It's funny how my mood, I'm telling you, my mood depends on whether I see red or green on the screen.

You guys, you don't feel the same way? No? It doesn't, okay. Try it a look. Try it look. trying not to look. I'm looking all the time. I'm literally looking all the time.

Yeah, you're looking at the stock market. If my kids are in a good mood, then I'm in a good mood. So that's a good point. That's the most important. That's a good point. That's a good point. Yeah. At your age, I was felt the same way.

Well, it's good to be back. And we've got a guest. John, John Lear. John, good to have you. Yeah, great to be with you today. John always looks rested. Do you have you noticed that? He never looks tired.

I don't think they work him hard enough over there at more. morning console. He's got a cushy job. I think he's got a really cushy. That's my guess. Wow. Yeah. I'm just, you know, a Midwestern charm and a useful, a useful spirit. Hey, I didn't know you're from the mid, where in the Midwest are you from? I grew up in Indiana, just north of Indianapolis. Oh, you don't have any Midwest accent that I can discern. Very neutral. Yeah, not, not, I don't have any of that sort of Wisconsin, Minnesota, Fargo style accent. Nothing.

Even Michigan. Yeah. Yeah. Yeah. Yeah. Well, it's good to have you. So this is your second foray on Inside Economics. You came back.

Thank you. That's right. Yeah. I wasn't scared away. Yeah. Ryan does that to people, you know. A lot of people. Yeah.

A lot of people. A lot of people. And how, well, I wanted to ask you, because I think the last time you were on, you were building out your group, your. a group of economists at Morning Consult. So, and it probably, I'd like to know how that's going, but maybe just quickly, briefly, briefly, tell us about Morning Consult again. So for the listeners out there that didn't catch it last time you were on.

Sure. Yeah. So in a nutshell, Morning Consult is a global decision intelligence company. So we use daily global surveys to try to inform insights and actions. I'm the chief economist, so I focus on our economic intelligence or economic data sets. and analysis. We collect roughly 20,000 surveys every day across 44 countries on a range of economic indicators and then release three monthly reports focused on spending confidence and employment and labor markets. So we're just sort of constantly in this cycle, really trying to

find ways to integrate our data into existing data sets, understanding those relationships, figuring out how our data might shed light on some. otherwise area of uncertainty or darkness. And we've got a team now of six, soon to be seven, but we got six full time right now. So that's really exciting. Scott Brave runs our economic analytics group. So he's doing a lot of the high frequency now casting and a lot of that sort of pretty fairly technical forecasting work.

And then he's got two folks underneath them, both from the board here, from the Fed who are building out a lot of the data analytics work with him. And then I've got two analysts, Kayla and Jesse, who do sort of sit in between and they do a mixture of the writing and the narrative analysis as well as some of the more technical forecasting. That sounds like a great team. And hard to build out in this kind of labor market, isn't it? Yeah. Very challenging.

It has taken. I think it's basically taken since we spoke last, basically a full year. A year. Yeah. Wow. Wow. Well, you guys do great work. I mean, the one thing that kind of highlights it for me is you run that daily survey of consumers where you ask essentially the same questions that the University of Michigan asks in their survey. But they do it, I think twice a month and it's 500 people. And that's right. You're doing it with tens of thousands of people, right? Yeah. So every day in the U.S. we've got 6,000 surveys that we're running exact same five questions used by the University. Michigan. So it allows us to get that very high frequency pulse on the state of the consumer.

How are they feeling? It also allows us to do a lot of demographic and geographic breakouts that become fairly challenging with 500 completes a month. And then we can do the cross country, the real-time cross-country comparisons to, which right now is top of mind for a lot of folks, considering how troubled the world is. Yeah, I'm going to come back to that, the consumer surveys and what they're saying and how they vary across the globe. But before we do that, I'd like to just talk a little bit about the economic data that came out this last week. And, you know, if that's affected anybody's thinking about the economy's performance or where it's headed. And I think this last week is heavy on housing data.

So I thought maybe, Chris, you could give us a sense of that and what the data is saying about the housing market and perhaps the economy more broadly. Sure. Yeah. So there are a number of series that came out this week, this housing week, in terms of construction and sales. So the general theme is weakening all around. That's nothing new, kind of at least following our script in terms of where we anticipated things to go here. Mortgage rates remain high. So the MBA mortgage applications data came in light, was down about four and a half percent. So clearly the refinance market is basically dried up and what mortgages are being underwritten are primarily purchases. That follows or is aligned with the sales data that came out this week. Existing sales came in at $4.71 million. It's down from a previous number. So it's

again, indication of the weakening, higher rates making it very difficult for people to afford homes and sales are coming in. And then on the construction side, we also saw signs of weakening. So building permits actually were flat relative to August. So this is data for September, about 1.56 million building permits between single and multifamily, roughly flat from what it was in August. But housing starts were down and housing completions, I think, were roughly flat, maybe up a bit. So clearly on the housing start side, single-family housing is coming in and multifamily.

Although it's up, it's not up tremendously. So it's holding its own, but it's not accelerating at this point. And completions, as we would expect, we did see some increase there, but quite modest as well. You know, right before I got on this podcast, I was on a group of economy, that, so I think they called it an economic advisory panel for the New York Fed. And we talked through different issues. And someone on the panel brought up the point, the dark irony of rising interest rates hurting housing supply. You mentioned housing starts declining. Yeah. And, of course, we need more supply to get rent growth down so that we can get housing cost,

inflation, moderating. Because that's right now probably the biggest contribution. at least to CPI, consumer price inflation, I think, right now is the accelerating cost of housing, which goes back to rents. Do you have a perspective on that? Any views on that? That kind of dark irony of that? Yeah, I mean, it's the difficult situation. That's simply put, I think it continues to point towards the bluntness of the Fed's instruments. monetary policy can't solve everything. And we actually do need more fiscal support or fiscal adjustments here, I guess, to compensate and address this. This is really fine-tuning we're talking about here, right?

We need more supply of housing, but we don't want to cause more inflation. All right. So you need some type of fine-tuning that the Fed just can't handle with its tools. Yeah, I made the point that it depends on how high. how long these high mortgage rates prevail. I mean, because we do have a large number of homes in the pipeline under construction going to completion. In fact, I think it's still a record number. And it's kind of piled up there because of the labor supply issues and the supply chain issues related to the pandemic.

But now with an easing of those supply chain issues, we're getting appliances and building materials now making. their way here, and the labor supply issues starting to ease up a little bit, you know, because of the weakening and job growth hiring, then that will allow these homes in the pipeline under construction to go to completion, and that should help with supply at least for a while, maybe six, nine, 12 months. If rates remain elevated for much longer than that, then we've got a big problem. We're going to see a big decline in supply coming to the marketplace. Would you agree with that kind of assessment? Yeah, and that's consistent with the data, right? The completions are up, but the starts are down, right? And the permits, which I, you know, that's future building activity,

I view that as the option, right? They're builders are, they do see these positive forces in terms of still lots of demand, demographically driven demand, especially, but the cost to build is, or cost of borrowing is preventative. But isn't there an issue, though, with, you know, one of the issues has been these older, the baby boomers staying in their houses for longer. As home prices start to fall, all of a sudden they're more likely to hold on to their houses,

less likely to move into the sort of, you know, the smaller single floor ranch or something like that. So I guess I just wonder, you know, we're continuing to see sort of the sellers drop out of the market to fewer older adults saying that they're interested in selling their homes. I wonder if that's sort of a dynamic at play in addition to the new home part of the equation of just higher input costs. Yeah, so there's a lock-in effect across the board, right, especially with the lower rates that people have been able to lock in on top of that. So not only a preference perhaps to age and place and not downsize, as you mentioned, but even now the economics make it,

even less likely, right? Because they've locked in this 3% rate and locking in a 7% rate is just not feasible for most people. So John, you mentioned in your survey work, you're finding that potential sellers are pulling their homes off the market? The share of home owners intent on selling their homes

consistently fallen for the last eight or nine months. It was at 15% in February this year and down to 10% now. So I mean, I think that's what we're trying to sort of understand is that mismatch between the supply and demand over in addition to the new home part of the equation, which is course is important, just understanding this dynamic between potential sellers and potential buyers. Yeah, it's an interesting dynamic. I'm sort of the narrative in my mind is because we've seen house prices decline here pretty sharply in a very, in a very short period. I mean, house prices, mortgage rates started to rise in the spring. House prices appear to have peaked in June nationwide. And they're coming in now pretty fast. And according to our

house price data, more than half the metro areas across the country now are experiencing house price declines in places like California. Chris, what is it? What are price declines now in like San Francisco and I believe it was around 8%. Yeah, some pretty big declines. It's a matter of months, right? So it feels like sellers are actually capitulating. They're saying, oh, these mortgage rates are high. They're going to stay here for a while.

Oh, and by the way, there's a recession coming. So I better sell now. Otherwise, if I try to sell six, nine, 12 months from now, I'm going to sell it at a lower price. And you're seeing prices come down very rapidly. But the volume of sales is down. Yeah, that's true. So it's consistent with the sellers taking their homes off the market. Exactly.

To John's data. Yeah. I mean, we actually saw that months of supply actually rose. Yeah. Right. But that's a bit of a head fake, right? Inventories came down.

It's just that we're not selling at the, we're selling at a slower pace, right? So we often talk a lot about the new home market, but that's only 10% of all home sales. Right. Existing that was John was referencing. That's the key part. You know, people are just not going to list their homes.

now. Right. Right. Right. So, Ryan, since we, you heard your voice. So given, and that's rare, I took him this long for me to hear his voice. Generally, I hear his voice, you know, kind of immediately. Well, I was going to point out that you just said a recession is likely. I said, they think recession is likely. They think. Someone had, someone had a quote in CNBC. You know, you take everything out of context. John, he does this all the time. Yeah. Chris, is that out of context?

He doesn't, you got to dig deep. We've got to dig deep into the, but we'll come back to that. We're definitely coming back to probabilities of recession. But I was going to ask you a question. Oh, based on everything that's gone on this past week, all the economic data and everything else is going on and a lot is going on. Is your sense of how the economy is performing where it's headed changed at all? Are we still on track to that recession?

No, I think we're still on track. I think our baseline forecast. is still roughly right, that the economy is clearly slow and next year is going to be even more difficult. But we got a lot of housing data this week. We got industrial production, which actually came in a little bit better than I anticipated. So that was encouraging. I think the parts of the economy that we would expect to weaken by higher interest rates, stronger dollars, manufacturing, housing, that's all kind of playing out to script. It's whether or not, and this is why it's great to have John on, can the consumer hold on? And if they do,

then we can skirt a recession, but nothing really this week changed my album. Well, what did you just say we could skirt a recession? Didn't he just say that? That's our baseline forecast. Yeah. So we, you think we can skirt a recession? No, you're saying.

I didn't say you, I think we can. Oh, that's the baseline. Well, it's possible is what you're saying. It's possible. It reminds me a little bit. I grew up caddying and people would always ask me if it's going to rain. And the caddy master's answer was always eventually. And I think, you know, right, so are we going to skirt a recession? Will there be a

recession eventually? Eventually, eventually, though. Yeah. I have a lot in common with you, John. I caddy too. Yeah. Did you really? I did indeed. That was like, that was a great job, I thought. Great job. Yeah. Really, really bad. Hard. You know, did you, did you double bag kind of? Eventually, I started when I was, the bag was bigger than me. So it took me a couple years to, to grow into the phase where I could carry a bag. But it was great. I got a partial college scholarship out of it. Oh, you must have a little catty. Geez, you must have a great caddy.

It almost sounds like the movie Caddyshack. A little bit. It was a little like that. There were some characters. Yeah. Well, you know what, John, do you, I know you watch the economy very carefully from your prison.

And just a level set, Ryan is very bearish on the economy. What, 70% probability of recession in the next 12 months? 75, Mark. 75. Oh. Oh, Chris is...

Bumped it up. Is also bearish not quite as bearish? Are you 70%? I'm 70. I'll stick with 70. And I'm at 55% over the next 12 months, not as bearish. I think I would split the difference probably. And I would say a lot of it, oddly enough, is from all the day that we're collecting, really over the last two weeks, is just consistently come in lower than I would have expected.

We have this Scott Braid and Kayla built what they're called a. consumer purchasing power barometer and just really starting to see instances of middle and high income consumers walking away from a pretty wide range of purchases due to higher than expected prices. And it's been a really strong indicator thus far, leading indicator of real PCE. And so I think, you know, it's hard to say, but I think the first quarter of 2023 is going to be marginally negative. And then it's a question of what that second quarter will look like. I think it's going to be really, really close.

Well, Q3, just end to Q3, that's going to be positive, right? We're tracking around 2%. Yeah. So did I speak? I'm talking about the first quarter of 2023. No, I know. But so what do you think about Q4? Do you think Q4?

No strong views. It'll be, I bet it'll be point something. Okay. Point something, either point something positive or negative, but it looks to me like it'll be almost flat. So you're, you're thinking reset. So what's the probability? I put it closer to 60%.

Okay. And you're thinking, 65% in the first half of 20203. First half of 2023. Okay. And that Q3 number, that GDP number, just like the first half of the year, it needs another asterix because if you take out trade net exports, we're tracking point. 4% annualized, which is very, very weak. Like inventories and net exports cause those declines in the first half of the year.

Now it's adding to the second, or Q3. But if you strip out the weakness in the GDP data is becoming more prevalent. Yeah. Well, it feels like if you strip out the net exports since this time last year, GDP has basically been flat. Yeah, we're moving sideways. We're moving sideways. On GDP. Yep.

On jobs, still lots of jobs. Yeah. In fact, we got another strong data point there on U.I claim, initial claims from unemployment insurance, which is a window into layoffs. They're very low, you know, just... I'm puzzled by that. I was surprised because I thought Hurricane Wright was going to choose Florida and they fell in Florida. Right. Right.

Which indicates that the labor market is still strong and not at all consistent with the idea that we're certainly not in recession and it's not. Recession is not imminent. And I'm not saying you guys think that. You're also a first half recession kind of guy, too, aren't you, Chris? And Ryan, first half 23? That's when you think the recession will hit. Probably more second quarter versus first. Yeah.

Okay. That's splitting hairs, but okay. Well, fair enough. Give me a little color, a little insight. You got to give a month, a day, an hour. Yeah. So, John, one indicator that I look at for gauging recession, whether it's imminent or not, is the change in consumer confidence. Not so much the level.

Right. Right now we know everyone's very pessimistic and dark. They've been that way for a while since the pandemic hit more or less. But it's really when it changes to the downside in a very significant way, because that indicates that consumers are losing faith, I think, you know, that they're going to hold on to their job and they go, oh my gosh, and they stop spending. And that's recession. When the consumer packs it in, we go in. In fact, I'm sorry, this might be the competition, but I look at the conference board survey, the monthly survey. And if by looking historically, if that survey, the index falls by more than 20 points in a three-month period, we're in recession six months later on average. It takes about six months for that to happen. That's not happened so far. The last, the last, state a point we got from the conference board was actually not bad. It actually improved a little bit. And three months, over the past three months is basically flat. So that indicates if history holds and that relationship holds, no recession, certainly into next year. Does that, does that resonate with

you, that kind of frame? I mean, certainly it's the case that it's the change in confidence that matters. And you see that really clearly if you start doing, you know, demographic breakouts or country, country comparisons, you know, looking at difference in levels doesn't tell you a whole lot. But, you know, for us, what we've been tracking for a while is this sort of ongoing divergence between what we've seen in confidence, which has fallen precipitously this year, roughly 15, 20 percent this year. And then the actual spending data. You know, it's held up remarkably well. When you go back and look at the updated national accounts data, it looks even better. I think in hindsight, the first half of the year was pretty strong.

And so there's something going on. I think that is largely this really, really strong jobs market in a robust war chest of savings. We're starting to see that savings dwindle pretty rapidly. And then there's sort of a question of whether or not the income stream that consumers are benefiting from in the form of wages will dry up. What I can tell you most recently, is that confidence is yet again falling despite the fact that gas prices have kind of leveled out.

They're increasing a little bit, but it's a pretty dramatic difference from, let's say, what we saw over the course of the summer where this rise in gas prices was very, very strongly correlated with the fall in confidence. Oh, interesting. So is this the questions that are similar to the University of Michigan survey? Okay. So that daily survey that you do, you're saying recently, what last? A couple three weeks is...

Three weeks was the other turning point, yeah. And is that broad-based across all demographics, high-income, low-income? Basically, and what I've been watching really closely is older adults. It feels like they kind of get how inflation is likely to play out and affect their finances in a way that younger adults don't. And so older adults in many ways have been a sort of a leading indicator of the broader consumer sentiment over the course of the last 12 months. And older adults have become noticeably more pessimistic about the economy in the last three weeks.

And we're starting to see that essentially sort of trickle down like a waterfall effect to hit other age groups. Oh, that's interesting. So your data would be consistent with this frame of falling consumer confidence leads by a few months. And this weakening you're seeing right now would be, if it continues, would be consistent with the forecast that you made that we're going to experience some negative numbers in the first half of 2023.

I think that's right, yeah. Although I should add, maybe it's surprising, but, you know, the company mentioned the Congress board, they have a lot more focus on labor market outcomes. We track, you know, whether or not employed adults expect to lose income. That number has continued to fall. So among people who are working, it's really something like 9% expect to, you know, have some sort of pay loss, which is down from 12, 13, 14 percent earlier this year. So the people who have their jobs are really, really feeling great about it. And there's a question of what sort

of shock might happen, I think, that could dislodge those votes. Yeah, could it be the case that this recent weakness you're seeing, particularly among older Americans, is related to the weakness in the equity market? I mean, we saw pretty sharp decline. Yeah. Also very possible. Yeah. Okay. Okay. Interesting. All right. So you're pretty pessimistic as well. Not as dark as these two other guys, but pretty pessimistic. But if your forecast is correct, it sounds like we need to continue to see further weakening and sentiment here, which will ultimately have to show up in spending.

That's right. Okay. All right. Let's do this. Let's play the game, the statistics game. I think this is a good place to play it before we go back to some of the other work. John, that you're doing, survey work that we want to talk about. The game, as most listeners know, is we each put forward a statistic. The rest of us tries to figure that out through questions, clues, deductive reasoning. The best statistic is one that is not so easy. We get it quickly, not so hard that we never get it. And it would be nice if it's apropos to the topic at hand. But I'll warn you guys, mine has. nothing to do with anything.

So it's going to be a little tough. I'll give you a few hands. Did it come out this week? It did indeed. Okay. All right. And I'm not sure if I answered that question, the way I answered it will help you or hurt you in your quest.

But it is relevant in that sense. It's timely. Let's put it that way. It's a timely statistic. All right. Okay. All right. Who wants to go first?

Ryan, you want to go first? Yeah. No, but Chris go first. A lot of housing data. Chris go first? Okay, Chris, you go first. All right. And I have a feeling this is a housing statistic.

It's got to be. Let me guess what it is already. Before you would say it. No, only kidding. It could be a housing statistic, but another statistic that if you get this, you know, multiple cowboys. I'm a God. I'm a statistic's God if I get this.

This is very esoterror. There's collusion. No collusion. There is no collusion. My number is 35. 35, yeah. Okay. Is this buyer traffic from the NHB?

Oh, well, that would be the housing. Over what period? What? Next six months? Next six months. That would be the legitimate 35 to guess. So I'll give you the cowbell for that. No, wait a second, but that wasn't your statistic.

But, well, there's another 35 out there. That's not fair. That's not fair. Hey, there's another 35 out there. Take it back. What? You can't give a cowbell for a statistic he just made up. Even though this is 35.

I said that that, I said it there was also a 35 that was housing related and that's the one. Oh, I see. I think it's a other 35. The 35 I want to talk about is different. No units required when you play this game. Well, if you need the units, John, I mean, you know, come on. You need the units. will give me the units.

Is this a percent? No. Is it a statistic that came out this week? Yes, it was reported in a Wall Street Journal article. Oh, my. Oh, God. It is a statistic. It comes from a legitimate agency.

We don't cover this on economic view. No. Is it housing related? No. Oh. Is it one of your, like, random survey? Is it survey based? Nope.

Would you like the units? Yes, please. Yes, yes. 35 ships. Oh. Is that the number of 35? Ships or ships? Ships.

Ships, boats. Large boats. Yeah. Is that the number of boats parked off Port of Long Beach? No. No. That's actually down. I hear, I heard that's down to nothing now.

That maybe they're just managing it. They're all out in the Pacific. It could be. Is that the number of ships in Shanghai port? No. They're getting further. Oh, further. Hmm.

This is, I promise it has relevancy. No, I said it's got to. Is it related to supply chain issues? Not particularly. Oh, okay. Is it ships parts somewhere? It is ships. somewhere.

Russian energy ships. Oil energy, energy. On it? Oh. It's the, okay. Go ahead. There are 35 ships that, LNG ships. Oh.

That are parked off the coast of Europe. We should have known that. That's a lot of ships. It's a lot of ships. They are, so they're not unloading the gas that they have because so far the weather has been mild in Europe. Oh. They're not drawing down.

And then they're at capacity. Storage is maxed out. Isn't that interesting? But they're waiting there because they expect that prices are going to rise. It's still in their interest to wait. So my optimistic view is that that actually could help us in terms of keeping energy prices down, right? You saw a big drop in UK utility prices recently. Exactly.

And in the EU overall. Because of this or something else? Well, I think it's a mix, right? The mix of things. So the other factor is China, which we, of course, now we don't know what's going on there. So they're not releasing GDP stats. But if there's weakness there, right, that's lowering demand potentially. So there's that.

And then the supply certainly is encouraging as well. Yeah, that's actually that's a really good statistic. I thought so. Yeah, yeah. I mean, impossible for us to get. Absolutely. But nonetheless, you know, very interesting. And they're at capacity right now in terms of their LNG storage. Very close to it. They actually didn't, they don't have capacity to unload more ships at this point. I see. Well, that may explain why natural gas prices here in the U.S. are also down, right? Because we're back down to like $5 per million BTU. We were almost double that, I think. Back, yeah, we're close to time, right? Yeah, so that's also encouraging for us in prices here.

I also notice that storage or inventory of natural gas is pretty strong here as well. It's been surprising to the upside. So I guess that's all consistent. Oh, that may go to exports are down from the U.S. as well, right? So it all fits. Okay. Ah, the dots are being connected in my mind. See how that works?

Yeah. So it could help. It could certainly help the inflation picture here. Yeah. Okay, very good. Okay, that's a good. That was a good one. Hard, but a good one. John, you want to go next? I'll go. I, you know, I should say, I'll preface this by saying the last time I was here. I think Ryan guessed this in like two seconds. So I have dramatically changed the scale. Oh, no. A slightly more arcane, less well-known statistics. So this is, the statistic is zero. I'll give you the units to. It's 0.9. percentage points. That's a statistic, 0.9 percentage points.

Came out this week. Came out this week. Is it something that you guys? It's not. Publicly available government released. Is it related to industrial production? Nope. It's not.

And housing. No, it is related very closely to something that is near and dear to what I'm working on. Inflation expectations? No. He paused. Did you notice that? He hesitated. No, no, sorry.

Sorry, that was a head fake. But related to consumer spending in some way? No. Wages, incomes? Closer. Closer. Oh, is this median usual weekly earning? What was it?

Closer. And you've got the, you got the wages, be correct. BLS, Bureau of Labor Statistics. Okay. What else came out from the BLS this week? I'm not sure. Is it wage-related? Labor market-related?

Labor market-related? Oh, is this the insured unemployment rate? No. That's 1%. Is it 1%? It's regional data. So you've got to pull things back a little bit and dive in a little deeper. Wow.

But did this come out today? Oh, to the morning. Regional state-on-employment. state unemployment. There we go. Chris is starting to think. That was this morning, though, right? No.

Are you going to... Oh, is that the unemployment rate in Iowa? It's where... Indiana. Indiana. Indiana. This is the... I'm not going to give it to you.

No, no. No, no. No, no. This is fine. We're just going to name all 50 states. All in the Midwest. Nebraska. It's the highest of the month over...

It's a month-over-month change, and this is the highest month-over-month-month-change. Oh, you go. This is hard. Yeah. So there's the largest increase in the state unemployment rate. In not an unemployment rate. Oh.

Oh, I think we should give up. This is getting embarrassed. Yeah, this is embarrassing. It's embarrassing. Ryan's getting embarrassed. Look at him. We got a two-month lag on this. So today or yesterday they released the state-level quits rates. Oh.

Oh, wow. That is digging deep. So that is the value for Oklahoma, which had the highest month-over-month increase in state-level quits, but that's for August. And the only reason I know that is because we're doing a lot of state-level analysis of whether or not employed people are looking or actively applying for other jobs. So we track on that same consumer confidence survey, we track whether or not employed workers are actively applying for other positions and trying to figure out what sort of dynamics we can identify. at the, you know, state an MSA level. So I think, I think John gets it.

That is probably the most difficult statistics that we've ever had. Well, yeah, I should come on. I think last time, right, I don't even think I mentioned it. I think I had said, you know, that one was good. It was good. You guessed the thing right away. Okay, these guys are pros. Let's come in and be a little bit more prepared.

So, but in general, quit rates are coming, they're elevated. They're high. They're high. They're coming down. Apparently. I don't know. I'm skeptical. Oh, really?

Well, the reason I say that is LinkedIn came out today with an indication that their, their proxy for quits is back up. The national number that we track has started a trend higher again. So the quits number is for September, I believe, right? Yeah. It's the most recent data that we have. So you're right that September things fell. I'm skeptical that that trend is going to hold. Oh, well, that'd be a problem, actually.

Right? Because quits are tied to wage growth. Wage growth is tied to inflation. That's tied to what the Fed's going to do or not do. So quits start moving back up again. That feels really, that doesn't feel right to me. But wow. You're right, though. To forecast the employment cost index, which is our preferred measure of just use quits. It does a really good job. Yeah. That would be disappointing. That would be disappointing. Okay. All right. Well, that really tested. us, I'll have to say, John. That was tough. That was tough. Oklahoma, the change in the quit rate in Oklahoma in August. Okay. Okay. Preliminary too. Well, that'll be revised. Seasonally adjusted or unadjusted, John? Seasonally adjusted. Oh, okay. I thought you're going to give us the unadjusted change. Yeah. So, yeah, now 35 ships off the coast of your business. Yeah, that's easy. That's right. Ryan, show us how the is done. Give us a statistic that we have some reasonable probability of getting. Go ahead.

Right. Minus 86% year over year. Minus 86% year over year. I'll give you another. I'll give you a hint. Okay. So if you look at the level, it's the lowest since the late 1990s, early 2000s. This week? It came out this week. Down 86%. Is an economic statistic that came out this week?

Yes, yes. Economic statistic. Okay. It's not a financial market variable or, yeah. Come on. Is it housing-related? It's housing-related. Yeah, okay.

Is that something around the inventories? inventories? It's not inventory. No. It's not mortgage. You're getting close, Chris. Refi? Refi.

Refi. Refi. Oh, okay. Oh, yeah. Refires are down. Cowbell. Yep, refis are down 86% year over year. Yeah.

And that index is the lowest since the, so if you look at the refi index itself, it's the lowest since the late 1990s from 2000. So it ties us back into the housing-related data, but also consumers. They're not, homeowners aren't refinancing because of higher mortgage rate. So, yeah. Well, let me, let me reverse the game on you. What do you think the average interest rate is across all mortgage loans outstanding? You take all the loans out there, look at their mortgage rate, take an average.

What do you think it is right now? 3.8. Pretty close. Three and a half. Three and a half percent. So, okay, you're three and a half in the more, the current mortgage rate is well over seven, isn't it, on a three-year fix? Mm-hmm. So you can't...

You're locked in. Well, yeah, the only reason you would do it is you desperately need the cash, right? Right. Cash, so-called cash out refy, but you'd have to be pretty desperate to do that because that'd be pretty expensive to do. Exactly. Yeah. Interesting. All right.

You want a number that's more difficult than Johns? More difficult than the change in the quit rate in August in Oklahoma, seasonal adjusted? And I won't let you guys suffer too long. Yeah. 13. 13. Are you really want us to try to figure this out? Just take one shot. It's a number of references. I'll give you a very easy clue.

Bejewik? Yes. Oh, way to go. There's no data in the Begebook. References to Recession? Yes. There's 13 references to recession in the latest Bege book, zero in January. And these are comments that the Fed collects from businesses,

in the district bank areas. And they're hearing the word recession now. Yep. You're starting to see more signs and references to recession. And this goes to John's point about consumers starting to lose their nerve because they're thinking recession too. Interesting. All right, Mark, let's hear yours.

Okay. Mine might be a little hard too, but Ryan, you should get this one because it's something that we've been talking about. 4.97% 4.97% 4.97. Is that the terminal Fed Funds rate that markets are? That's good.

No, that could be. I think that is also 4.97. I don't think it's that high? 4.97? I think it's close to 5 now. Oh, okay. No, that's the wrong 4.

I see, Chris, I do not award a cowbell to that because that's not the 4.97. Do you have your cowbell? Next is 4.97. I got my. I got my capital. This is from Vijay. So is this a financial market variable?

It is indeed. Okay. It is indeed. And it's a daily data point. Inflation expectations? One of your... Nope. No, bond market rate.

Spread. Very good. High yield corporate bond spread? Yeah. High yield corporate bond spread. Yeah, 497. That's very puzzling. That's 400.

97 basis points, 4.97. That's the difference between the interest rate on a so-called high-yield corporate bond. These are bonds issued by corporations of lower quality below investment grade relative to the 10-year treasury yield, the risk-free rate. So on average, historically, that spread has been almost on the nose, 500 basis points, 5%. And it, you know, I'm taking it all the way back to when the junk bond market was put on the planet in the late 90s by Michael Milken, 500 basis points. So we're exactly within a basis point equal to the long run average. Now, historically, that spread will rise when the economy is under a lot of stress and

recession is a real threat, right? Because investors think, oh, we're going into recession. Businesses are going to start losing money. They're not going to be able to pay back their debt. Therefore, you've got to pay me a higher interest rate to buy that bond. to compensate for that risk, that default risk, that credit risk. But you don't see any of that in the data right now, none, zero. So how do you explain that except for it's not consistent with the idea we're going into

recession, at least not any time soon? How else would you explain that? What's the typical lead time? It tends to start rising several, six months before, from. very low levels. And then once it blows through that average, 500, that's about the time, you know, a month or two later you're in recession. But the trajectory is straight up, you know, straight up because defaults start to mount pretty quickly. But you just don't see it in the data. Yeah. Do you have any, yeah, I think we talked about this. Yeah, I mean,

at least historically, you can, you know, the high-yield corporate bond spread is very closely tracks the VIX. So if you run a regression, you just model high-yield corporate bond spread off the VIX. The VIX would say that the high-yield corporate bond spread should be closer to 700, 800-based points now versus 500. And you see that relationship is pretty tight, you know, historically, and it's broken down since the financial, or the pandemic. And I think our last podcast, I think we had Aaron Klein from Brookings on. And him and I, I think we're on board with the idea that there's moral hazard, you know, central banks have gotten involved in the high-eoil corporate bond market or the corporate bond market. Bank of England next week is going to start buying corporate debt again. So maybe that is kind of causing this relationship to break down. But spread should be a lot wider than they are right now.

Yeah, I just, that does, I mean, I hear you about the moral hazard. I just, that doesn't feel right. I think, put yourself, I'm an investor. I buy an investor in fixed income, corporate debt. Do you think that you really touch a high probability that the Fed's going to bail you out? It has to be a crisis. It has to be. It has to be. like pandemic shutdown before they would step in, right? No. Corporate profit margins are wide. Perceptions of credit risk are low. I mean, if you look at the Moody's default forecast, you know, it's still very, it's going to rise. It's going to normalize a little bit, but I think they're forecasting two to three percent

next year. So I think that's also helping keep spreads tighter relative to where bond market volatility or stock market. That's my point. Maybe the economy is, you know, you guys are too pessimistic, right? I mean, no. I mean, being realistic.

But the bond market is saying, you know, at least in this case, this statistic, if you take it at face value, you know, maybe there's other technical factors going on. Who knows?

But it'd have to be pretty whopping big technical factor to wash out the messenger. I don't know. Just I find that interesting. Yeah, no, it's fascinating. We've been doing a lot of, you know,

work in this and trying to kind of date where we are in the credit side. Yeah. Things seem to be tightening, but they're not tightening so quickly that it would be a recession. Okay. All right. Okay. You see, John, that's what he does.

He cherry picks. No, I mean, one number, one number out there that supports this non-recession. Okay, wait a second. I have four indicators I'm looking at for recession. One is the policy yield curve, difference between a 10-year and the Fed Funds rate. That has to invert. The fund rate has to go over the 10-year. I don't know if you've noticed, but the 10-year keeps moving.

in North, and it's now over 100 basis points, a full percentage point above the current funds rate target. So that's not consistent with recession. We got pretty close earlier this week, though, right? What's that? It did see a narrowing between the tenure and three months earlier this week. I said that I said the funds rate. I said the funds rate.

Don't forget. The funds rate. I'm just saying. These podcasts are recorded, Mark. So we go back. I know. I'm just saying. You've mentioned yield curves.

You said the 102, the 103, the goalposts. I've got four indicators. The second one is the. Changing consumer confidence. That's still not signaling anything yet. Now, what John said, did my hair, what three hairs I have on my head did stand up when he said it. So I'm paying attention. Third is this, the high-yield corporate bond spread.

It doesn't feel like that's saying recession dead ahead. And, of course, the unemployment rate, which doesn't give you any lead if that's rising, but that rises more than half a point year over year. You're in recession. But right now, that's three and a half percent. and given the UI claims, it doesn't feel like that's going to be rising here anytime soon. So those are the indicators that historically, they would be saying, if we're going into recession first half of next year, they've got to be tripping wires here pretty soon, right? No?

I guess my only pushback there would be, you know, to say historically, you know, when's the last time that we had 8% inflation? I think it's a little challenging to figure out how this is all going to play out when the dynamics are so unique to this particular experience. I mean, that's maybe what people say about every recession. But you almost need to go look, I think, at emerging markets or places that have experienced fairly rapidly rising energy costs and inflation and figure out how that sort of plays its way through the economy. Oh, that's interesting. So you're saying my indicators are sending false signals because of the, they're skewed by or biased by the current environment. I mean, I think we're, everyone, we all have in the back of our mind, you know,

the financial crisis, credit conditions, hyper-focused on how that might, you know, how a lack of liquidity might play its way through. That doesn't feel like that's the case right now. You know, probably not housing. So, you know, what's the mental model for thinking about this particular recession? And then how should we adapt our interpretation of a lot of the, different indicator. That's a good point.

That's a good point. And talking about the, kind of the, what it's going on in people's minds, let's go back to your survey work on consumer inflation expectations. Yeah. Because my sense is that if that's going to really determine to significant degree fundamentally how things play out here. If consumer, so of course, inflation expectations. expectations jumped, first with the pandemic, and then got pushed up much higher because of the

Russian invasion and the spike in oil prices and other agricultural goods prices. And that increase in inflation expectations, first of all, sent the Fed on high alert and caused them to really pivot and start raising rates. But it also goes to the kind of surge in wage growth that was out of bounds relative to kind of our traditional measures of labor market slack. like unemployment, like the employment to population ratio. And so to get wage growth back in to something consistent with the Fed's more normalized level rate of inflation, 2% inflation, those inflation expectations have to come back down.

They have to normalize. And it feels like, and I'm going to characterize the data and then turn to you and say, if I got it right, that it feels like it's starting to move in the right direction, expectations of inflation are coming in, but they're still very elevated. Is that right based on your survey? In the U.S., I think that's right. So we, I should say, you know, we've taken a unique approach to measuring inflation expectations. We call it the indirect consumer inflation expectations. It's a collaboration with researchers from the Cleveland Fed and Brandeis University. And so what we do is we ask people, how much would your incomes have to change to make you equally well off for the change

and the prices of the goods and services that you buy. And so it's really tying together this concept of wage growth and price growth. And what we have seen, so we measure in the U.S., we do 20,000 respondents per week, and then on a monthly basis, we do, I think we're now at 20 countries and we do 1,000 responses per month. And so just this past week, we've seen a moderate decrease. So now I think we've got on the level front where I like seven. 0.01% for the 12 month ahead inflation expectation. So it's a little high on the level front,

but the trend has dramatically fallen from where we were in the middle of July. I think what's interesting is it's just not it's not a clear decrease. It's like the turning points are much higher now than it was during that earlier period over the summer where just every month things got higher and higher and higher. Now we see it's down one week, it's up another week. It's down one week. It feels like consumers really don't know what to make of all this because you've got high levels of prices, but also concerns, right, that maybe we're going to go into a recession, maybe prices, you know, that would sort of suck some of the wind out of these price increases. At the same time, I think I was talking about this earlier, you know, they were

previously very strongly driven by gas prices. We're seeing that relationship dissolve, a little bit. And then maybe the last thing, not to sort of totally go off topic, but we just, we just published this today with the Cleveland Fed. So I think it's probably interesting, which is we ran a flash survey in the UK trying to figure out if all this sort of uncertainty in political and economic uncertainty, how that was affecting inflation expectations there and saw pretty dramatic increase, particularly among people who followed politics very, very closely.

And so I think, so that's maybe the high level piece. These are all 12 months ahead inflation expectations. Can I ask why 12 months? Why not longer term? Well, we also have the five-year number two. That was added after the facts. We've got, I think, now only maybe three months of that data. But what's been interesting is we just don't see the, I mean, they're very, very strongly correlated.

We see people who have higher 12-month inflation expectations in general, and also have higher five-year inflation expectations, which is a little different than what the New York Fed reports. They sort of see the way that they are asking consumers, there's a greater difference, I think, between those two measures. So the one year ahead inflation expectations is 7%. That's right. Which obviously is pretty elevated.

Of course, the current inflation rate, CPI, consumer price inflation is a little over eight. So that's obviously influencing that thinking. But is it is it what's the peak in that? I think the peak was we saw it in at the third week of June. I think it was just shy of 8%. Oh, so it's only come down a point. It never reached 8%. Yeah, yeah.

But it was it was at let's say 3% in February of 2022. I mean, the summer it was this, I mean, every week you could just feel it building. And then the other point I was mentioning is that while we've seen this decrease in the, you know, the measure of central tendency, the average that we report, the distribution of the respondents has fairly dramatically changed, with a much higher share as the end of that, the tail. So you've got more people who think that inflation is going to be something like, you know, 10% or higher, which is a little concerning. You know, it's hard to, and that's, I think, the challenge with inflation expectations is figuring out how to make sense of it with a single number when the distribution might be evolving as well. Any difference across demographic age? Really, really, really strong differences. Okay.

Here again, similar to confidence, you see higher, older adults, much more likely to have higher inflation expectations. They've been more responsive to changes in prices as well. it looks like younger adults, they just don't update their inflation expectations as quickly from week to week. We see geographic divergences in general consumers living in metro areas that have elevated inflation, also have higher inflation expectations. The same is true globally. I think it's consistent with some of that finding that, you know, people who know that inflation is a really big problem, all of a sudden they start tracking prices very, very closely. And it's a luxury, essentially, to be able to not have to worry about inflation and live your

life and make your saving and spending plans in a world of 2% inflation where it doesn't change the cost of bread. Have you looked to see if food prices are a key contributor to short-run inflation expectations? Because they are, at least in the University of Michigan. It's food prices, it's gas prices. I'd have to go look. I think what we've seen, we've seen food prices globally. I just don't think that we have enough variation at the monthly frequency with food prices

to start understanding what it means at the weekly level for inflation expectations. Do you see any difference by education? The New York Fed shows. We do see pretty strong differences. Yeah. Pretty strong differences with higher educated people and generally. have higher inflation expectations. Gender matters a lot.

Males tend to have higher inflation expectations. Oh, is that right? That's interesting. I wonder why that's the case. That's interesting. And so, yeah, there's a lot of, I mean, we're doing a lot of partnerships with a few other companies to dive into the data and really understand sort of how

these changes might be impacting. You mentioned you did a flash service. in the UK, are you doing this kind of survey in other parts of the world? Are you seeing the same dynamics everywhere? Well, slightly different dynamics. I think a surprising finding was in Russia. Following the invasion, we had a momentary increase in inflation expectations, and then it came down and it remained shockingly stable. That's consistent with what we've seen in our confidence data. Do you believe anything, any survey you get out of Russia, though? I mean, if I were, Jesus, I'd be so nervous to answer it.

I wouldn't, I'd be scared. Well, we're not asking about their views on Putin. But still. Well, we have seen actually, since as soon as he announced the conscription, we've seen a pretty strong and consistent decrease in. Oh, really? Okay. Okay.

So people are responding to it. Yeah. Those are online surveys, right? They're all online surveys. Yeah. But my experience thus far has been that, you know, those things like, you know, regime or level of economic development really dramatically affect the level. But as soon as you start looking at the trend, you can plot Russia on top of Europe and do a pretty direct country to country comparison. I see.

So what's the takeaway here? I mean, my interpretation of what you told is 7% down less than a point from the peak. I don't come away feeling warm and flussey. Not out of the woods yet. That's kind of my... I think we're still in the woods. It feels like to me. Yeah, still in the woods.

Deep in the woods. And the distribution, okay, that's your somewhat pessimistic outlook, I guess, because it feels like you need to have much higher rates to kind of much, slower growth to kind of ring that out? That's kind of where you're coming down. I don't know if they're fully unanchored, but it does feel like this period of higher inflation is ingrained in consumer psychology in a way that it wasn't a year ago. That is interesting. Now, the sentiment, if you look at the MishU MIS survey on inflation expectations, it paints a somewhat less dark picture, right?

Yeah, although they both, I mean, the New York Fed released something recently too. I think they're jumping around right now. Part of that is just the monthly release cycle. What we see is consistent with theirs in the sense that week over week, we're seeing a lot of more turning points than we saw three months ago. Okay. Interesting. Okay. Let me ask you, we're getting a little late in the podcast here.

I know you guys do so much interesting survey work. And actually, I'm sure you recall, but we did some work with you back. Yeah, that was great. It was great during the pandemic. Really found that very insightful work. I know you're working now on remote work. perspectives. Can you just fill us in on that? That's the topic we've been talking a lot about on the podcast as well. So I think there are two things. I mean, I should say this. I'm sitting at home

right now. So that should be I am. I mean, I have three out of four of us. Three of four of us. So there are two things. So on the sort of the worker front, we have seen very, very strong evidence that folks who work from home, first, of all, that their so-called burnout, their level of burnout is much, much lower. They report higher levels of job satisfaction, lower levels of work-related stress, even when you control for income, age, education, and occupation, or industry, sorry. And the second is that there's some evidence that they also assign a fairly strong sort of financial value to having that flexibility and freedom to work for home. Again, even after,

controlling for all those sorts of factors. So I think it's hard to see a world where you could strip people of working from home and not compensate them in some way. That feels baked. It feels baked in at this point. And then so that's part of it. The other part is we've started to run small business surveys as well. So from Q3, we saw, I mean, overwhelming majority, I think, 55, 60 percent of small folks

with 10 to 500 employees saying that they operate in a hybrid work environment. It just feels in many, many ways that that's sort of how people are expecting to operate going forward. I don't think that economists have fully thought through all the spillover effects of the ways in which that changes people's purchasing patterns, commuting times, and all that sort of stuff. Yeah, that's my sense. I think the game has changed meaningfully.

meaningfully. This is why Chris is always grumpy. He's going into the office. Yeah. You're right. Yeah. The grumpy economist. So any insight into the question of productivity?

I mean, to some degree, I guess that goes to, if workers feel more relaxed and better about their work environment, they're going to be more productive. But I'm leaping. Is there any insight there? we were running some survey questions asking people to compare their productivity to pre-pandemic periods. And that was showing that those folks who were working from home indicated that they were more productive than they were prior to the onset of the pandemic. But that data set, I think,

just kind of became less and less trustworthy as, you know, it was very difficult to ask people two years after the fact to go describe what was, how much work they were doing now. compared to two years ago. That's not sound survey methodology. It is clear. I mean, that's something that Scott on my team and I talk about a lot of just those, you know, the productivity numbers are terrible. Yeah.

They're really, really bad. And so when you talk about wages, that's one thing. But if you start talking about unit labor costs, it's a different, it's a different story. Yeah. Okay. Well, we can go on and on and on. But since I've got you, one more thing, you got these elections coming, right? Yeah.

two weeks, I think, less, less than two weeks. I know you do a lot on the other side of the House. You do a lot of political survey week. Any insight there? Can you handicap the election at all? I wouldn't handicap it because I do think it's going to come down to a lot of these contested races. It's very clear that Biden's approval rating is much lower than it was a year ago. We've seen some bounce back at the national level. I think, well, you know, what we all know is. just how important it is to go to look, you know, race by race, district by district, and start breaking out that data. I should say in some of the states that are some of the most contested states, we've seen that people's views of the economy, at least, have fallen fairly

dramatically relative to prior to the election in 2020. So there's a case to be made there that sort of the economy is certainly a headwind to incumbents holding onto their seats in those battlegrounds in its seats. Yeah. Okay. All right. I wanted to ask you one more thing. Oh, kind of an open-ended question. Yeah.

Because you are looking at a lot of different survey results. What survey result has surprised you the most, most recently? Like he said, oh, my gosh, where did that come from? Anything interesting out there? I think I'm interested I think a lot of times it's making sense of the we've done a labor hoarding survey that was interesting we the what labor hoarding labor hoarding with small business owners and tried to figure out to what extent they were holding on to workers even if they didn't feel like the demand was there you know basically it was a sort of a supply a supply labor supply issue that was driving labor hoarding with some, I think, fairly strong evidence, in fact, that there was labor. There's evidence of labor hoarding.

I told you a little bit. We just ran an updated random control trial, trying to understand the impact of wage expectations on inflation expectations. Oh, yeah. And for the first time, so we ran this, the first wave almost a year ago, and now we ran the second wave and there's evidence of causality running from wage expectations to inflation expectations in a way that that didn't exist before. It was strictly the inverse. And so you're starting to see now some evidence. Oh, bummer. That was surprising to me. I thought,

you know, I thought we had the first time we ran it was a 20% pass-through. So basically people expect to be made 80% worse off for a given change in prices. They don't expect their wages are going to keep off with inflation. Right. Okay. Well, that's a little disconcerting as well. Because, Ryan, your work has shown that its inflation affects wages, but wages have not turned around and affect prices or inflation, at least so far. So far. Yeah. Yeah. And we were using the employment cost index, things like that to see it. So it's interesting work to look at inflation expectations, wage expectations. So maybe that's the early warning sign that we're moving from a price wage spiral to a wage price spiral.

Be a problem. Yeah. Yeah. Okay. You guys are making me depressed. I need to go back on the road. I go visit Iceland or something. Well, John.

35 ships, Mark, remember. 35. That was a really good one, Chris. That was a good one. Yep. That was the one positive news, I guess. John, I want to thank you for coming on. It was really very thoughtful and interesting and really appreciate your insight. This is a special podcast because this is Ryan's last podcast on Inside Economics.

And I just want to say, no, no, I, I, I, I, In all honesty, being very earnest, I will miss you. Your insight, your thoughtfulness, your wit, I'll even go far as to say you're trolling, you know, really added to this podcast, you know, made it what it is. And it's a success. You know, we've done in a little over a year, I think we've seen our listenership rise to a very significant degree. I get lots of great comments.

Wherever I go, people are listening. And a lot of that success goes to you, Ryan. Thank you. I want to thank you. I'm going to miss you and Chris so much. I can't tell you how much this place means to me. It's hard, but just working with you guys for the last 17 years has been meant the world's to me. Yeah.

Right. Chris, anything you want to say? I still don't believe it. You still don't believe it. I have fully processed it. Yeah. This is your last podcast, though, right? Am I right about that?

It is. It is my last one. Yeah. I mean, we do have Marissa joining. Oh, yeah, you're in really good hands. We're in good hands. We're in good hands, but you'll definitely be missed. Thank you.

We're going to be watching the ratings very carefully here. That's a message to Marissa. Marissa. I told the ratings. You've got to keep Mark in check. That's exactly. Passing the baton onto her. And she's good.

at that actually. Yeah, but this podcast has been one of the highlights. It's every week I look forward to it. Yeah, I really do do as well. Well, thank you, Ryan. I really appreciate it. And thank you, everyone. One last cowbell. Well, actually, you know, we got all these cowbells with the three of us on the cowbell. We're sending them to your home. All of them. You're going to have 10,000 cowbells. That's perfect. Yeah, on your front, on your front stoop. my kids get sick, they want the bell. So when they're upstairs and they're like, they need something, they ring the cowbell. Oh, no, is that right? Repurposed. Oh, man. I nipped that one in the bud. Yeah, that was a bad mistake on my part. Yeah, bad mistake. Yeah. Okay, well,

with that, we are going to call this a podcast. Thanks, everyone. Talk to you next week. Take care.