Moody's Talks - Inside Economics - Missing Government, Missing Data

Episode Date: October 10, 2025

Justin Begley and Brendan LaCerda join Inside Economics to discuss the federal government shutdown and its macroeconomic consequences. First, the crew discusses how the shutdown is preventing the release of federal economic statistics, and Justin runs through a bunch of private data sources that can be used to gauge the health of the labor market in the absence of the BLS reports. The conversation then turns to the shutdown itself. Brendan and Justin opine on when and how the stalemate might end and the macro consequences of an extended shutdown. Finally, the team breaks tradition with the stats game.   Guest: Justin Begley, Economist, Moody's analytics and Brendan LaCerda, director Economic Research, Moody's AnalyticsHosts: 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' and BlueSky @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 of Moody's Analytics, and I'm joined by A-Trusty co-host, Marissa Dina Talley. Hey, Marissa. Hi, Mark. How are you doing? Our other co-host is A-Wall. I heard he's in Bermuda. He is. Poor guy. Yeah. On business, no less. I know. Yeah, what's that all about?

I don't know, but how do I get that gig? Have you ever been to Bermuda? No, I have not. Have you? Oh. Oh. It's a nice, nice spot. It really is a nice spot. Especially, you know, I know you live on the West Coast, but if you're here on the East Coast, it's pretty easy to get to. Although this time of here, it's a little iffy.

I know there's no hurricanes out there at the moment, but it's a little if. I think there is a hurricane out there, actually. There is a hurricane out there? Yeah, I think there is. I mean, I don't know if it's near Bermuda, but it's supposed to cut that way, I think. I track these things closely. I'm making sure it's not coming towards Florida, so. And this is Justin.

Justin Begley. Hey, Justin. Hey, how's it going? Sorry to cut in there. No, no, not at all. We need another voice with Dr. DeRees away in Bermuda. So there is another hurricane out there. That's what I've seen. And they say it's too early to tell, but it looks like it's going to be cutting up along the East Coast. So certainly could head towards Bermuda. Hopefully, Chris will get out in time. Yeah. He's a lucky guy, you know. Crypto portfolio is booming. Stock portfolio is boom. but he's like gold. You just, you know, I'm sure.

He can dodge hurricanes. Yeah. Gold is amazing. That's the other voice. Brendan Listerto. Hey, Brendan. Hey, Mark. Thanks for inviting me.

Yeah, you guys, you can't, you know, wait to get on. You got to, you know, jump the gun here. But I'm excited to be here today. It's been a while. It has been a while. It has been a while. So, you know, Justin, you're sitting in, where are you? You're in, like, Tallahassee somewhere, right?

Yes. Right in the middle of the panhandle. Right. And so you keep a watchful eye on. all storms, low pressures coming off the African coast, I assume. You know, about a year ago, I wasn't paying as close of attention because I was in an apartment and my wife and I could just be like, we're out of here, go up to our family in New York or, you know, shift to one way or the other.

But we just bought a house and I am like an anxious being right now. I am always on looking at the hurricane tracker, making sure nothing's coming our way. It's funny how you become a property owner, your whole perspective, on the world just. Oh, it does. Oh, it does. That's funny.

You know, I got, I have a home down there as well. So I've come to be a pretty good observer of those low, low pressure coming off the African coast. But I haven't, it's been kind of quiet, at least for Florida, it's been kind of quiet, this go around. So far. It seems that way. It seems that way. I mean, we're 10 days into October, we're, you know, by November, you're supposed to

in the clear, so we'll see hopefully we get there. Let's see how it goes. Okay. Well, it's good to have you guys on. And it's apropos because you guys are focused on this federal government shutdown and all things related to that. And I do want to come back to that and talk that through. But before we get there, let's talk about the data. And I guess the first question is, what data? Given the government shutdown, we don't really have a, we don't. We don't really have. We're not getting anything from the federal government, although I just read. Did I just read that the Bureau of Labor Statistics is calling workers back to construct the consumer price index, the CPI?

Yeah. Is that right, Marissa? Yeah, because they use Q3 CPI to calculate the Social Security adjustment each year. So if they don't have September, they can't do that. And that would delay the calculation of the cost of living adjustment. So they are recalling just the people that create the CPI for September. So they're going to try to get September out by the end of the month is what they say. So just so I understand.

So for the COLA increase, the cost of living adjustment to Social Security benefits, they use the CPI inflation rate year over year through the third quarter of the preceding year. That's right. So the third quarter ends with September so they need that September data. And I think by law, they have to set that by November 1, I think. And so that's what is behind this recall of the workers. Do you think they're going to release that data to the public? Yeah, I think they will.

They will. I think so. Oh, I don't think that, well, I don't, they may not release it next week as scheduled. They very well may not. Actually, I kind of doubt they will. But I think that they will release it once they've calculated it, probably by the end of the month, I think. What do you think, Justin? Is that your understanding?

That's my understanding. I think it's a very low chance that it comes out Tuesday. But, you know, because they really haven't been doing any work to survey the prices that have changed. But once they're all back, hopefully this week, then they'll have, you know, about two weeks to finalize this thing. And so which is actually good for all of us, especially economists, because like we can, we have a variety of labor market indicators that we can look at. from the private sector. Inflation is kind of like, that's like a shot in the dark. You might be looking at, you know, use vehicle prices or maybe house prices or whatever,

but it's very hard to compile together a CPI basket to have like a private sector version of inflation. Well, how good a number is it going to really be? I mean, even before this mess, I think 35% of all the goods and services canvassed by the BLS were not actually canvas because of a lot of budget cuts and cuts to staff. they were imputed. So how much, what percent is going to be imputed this go around? But Stan's reason. Although. Yeah. Although prior to the shutdown, they did hire a bunch of price collectors again.

Oh, they did. Yeah, they did. And I don't know if that will, you know, I don't know if that will happen, if those people will be employed fast enough to, to affect the September number. But this happened about a month ago that they rehired a bunch of people to check prices. Yeah, but can you imagine that they have to be onboarded, trained? Yeah, that's what I'm saying. I don't know if it will affect the September number, but at least that's a step in the right direction. Right.

Well, here's a great example of why these numbers are so important. I mean, this is real money for seniors, right? I mean, this goes to their benefit next year. How big an increase are they going to get? So if you don't measure it accurately on time, it has all kinds of. of implications. Okay, but, you know, let's, before we get to the government shutdown, as I said, let's, I know we've been working hard to identify all the various private data sources that are

out there. They have bearing on the economy, all these labor market indicators, and there's a whole slew. Actually, before I went through this exercise of trying to identify them, I didn't realize how many there are. There are all kinds of private data sources out there. And I know we're trying and working hard to bring them into one place and try to interpret them. Justin, I know you've been kind of spearheading that work. You want to give us a sense of what those sources are and what they're saying about the economy?

Sure. Yeah. So we've really identified a number of labor market indicators because, of course, that's one of the more important things that economists are looking at right now, particularly as the Fed is in this monetary policy transition, is really looking closely at the labor market, is looking closely at inflation. And so there's two types of private sector data that try to target an estimate of non-farm payrolls, those being on the private sector side from ADP, their kind of private sector estimate of payrolls. And then there's a newer data source that has a much more limited history, but is nonetheless an interesting compilation of data from Ravallio Labs. Of course, their chief economist came on the podcast very recently to do.

describe the data. And when these two were- Was it last week? I think that was last week. It was our jobs day. It was our no jobs Friday. No jobs Friday, right. Exactly.

Yeah. That's right. Interestingly, each of these are actually sending off slightly different signals. If you look at ADP, ADP is showing pretty much a lot of deterioration in the labor market. The labor market has shed jobs for the last three or so months. according to the ADP report. This is on the private sector side.

Revelliol Labs, they suggested that September had a 60,000 job gain. Nothing spectacular. But if you look at kind of the net change in total payrolls over the last year or so, it remained remarkably stable, soft, but altogether stable. So those are kind of sending to, you know, slightly different signals. Yeah, I think LinkedIn also has its own estimates, doesn't it? I mean, Revellio uses LinkedIn and other professional sites. But I think LinkedIn also does as well.

And I think they came in around 50. I'm speaking from memory. So it might not have an exact like 50, 55K, something like that. Okay. But there's others as well, right? I mean, all kinds of. You want to just. And I know, Marissa, you've also been looking at unemployment insurance claims.

So we'll come back to that in a second. But anything else, Justin, in your perusal of all this private sector data that is helpful in trying to understand what's going on? Sure. Yeah, I'll just kind of run through a list. I mean, indeed, the job posting site has a job posting index. That's largely shown that job postings have been on the decline for quite a while now, but suggesting that labor demand is softening. The ISM surveys, both on the manufacturing side and the non-manufacturing side, release employment indexes, both suggest that, that employment there is softening. All the regional Fed surveys also have employment indexes. The Fed, of course, is funded by a different mechanism.

So these are not going to be impacted by the government shutdown. Those, depending on which one you look at, you know, I think we've kind of assessed that it's that the trend is largely stable in manufacturing and non-manufacturing employment. Kind of measured by regional Fed surveys. There's also the Challenger report, which, looks at layoff announcements. Now, of course, announcements do not always translate into direct layoffs, but nonetheless, layoff announcements have been rising, suggesting some, at the very least, deterioration

in the labor market. And then there is the conference board, which releases expectations from CEOs on their intentions to hire more employees. And then also from the consumer side, there's the famous labor market differential, which measures the net percentage of consumers who see jobs as plentiful in the labor market versus those that are hard to get. And that's actually a pretty good leading indicator of labor demand and the unemployment rate. It seems like consumers have a pretty good idea of what their job situation is like. All of both of those, both the CEO survey from the conference board and the consumer survey are pointing to a sliding labor market.

And then finally, the NFIB has small business hiring. intensions as well. Those have been remarkably stable in recent months. Just to realize that's the National Federation of Independent Business, NFIB. That's right. So they're really kind of, most of their membership has, consists of businesses that have 50-year fewer employees. But nonetheless, still important for the overall labor market because they hire a lot of people on mass. And I miss, what did it say? What did NFIB say about jobs? The hiring intentions have been pretty stable over the last couple of months.

They haven't. But it's a decent leading indicator of future hiring. Got it, got it. And, Marcia, what about the UI claims? Because I know you can calculate them based on what the states are reporting from their own labor departments. Right. So normally every Thursday morning, we get national UI claims from the Employment Training Administration, which is a branch of the DOL.

But the states are still, but it's a compilation of state level data, right? And the individual states are still putting out. their UI claims data. So our colleague, Matt Collier, has been aggregating these for the past couple weeks. That was released this morning. There's a few states missing, including Massachusetts today, which is a relatively big state. It could maybe move the needle on this, but it showed that in the week ending October 4th, UI claims rose by 10,000. So from 24 in the week prior to 234 last week. So that's still, you know, it's up, but it's still pretty low. It's not a concerning number.

And then Justin had mentioned the Challenger report that showed that, you know, intended layoffs fell a bit over the month with their latest data. So it's still showing that, you know, hiring has stalled, but we're not seeing these massive uptick in layoffs yet. As I recall in our conversation with, I think it was least, assignment, the chief economist for Vellian Labs, we kind of went around the group and asked what was kind of your estimate of so-called underlying monthly job growth. So, abstracting from all the vagaries of the data. And I think you said zero to 25K, somewhere in that ballpark.

Is that right? Yeah. Given all this, all this happened in the past week, all the data you've looked at from private data sources, including today's UI claims, has that changed? Is it still zero to 25? No. And, you know, there's another, I didn't know this. Actually, I had dinner with some clients the other night. And a client mentioned this to me. So I looked at up, the Carlisle group, you know, the big private equity firm is putting out their own employment estimates based on all of the companies that they have in their portfolio. I don't know if you guys saw this. So they came out the other day with an employment estimate for September. And that was plus 17,000. And they bench it to the payroll survey to try to. make it comparable. And I've also been looking at the relationship between private sector payrolls from BLS and Rivellio and ADP. If you take the average of Ravlio and ADP over the past five years, there's a 95% correlation with the payroll survey. So if you just kind of average those two numbers,

I think it's a pretty good approximation. And that would be right in line with like what Carlyle group put out. It's kind of, to me, it's all saying somewhat the same thing, which is that we're adding, we're maybe adding jobs, but not very many. So yeah, I think the underlying pace of job growth is probably somewhere between zero and 25K right now. And that's pre-revision, because Revellio's gets revised. Not gets revised. That's right. And so does ADP. That's right. And they're all recently getting revised down as they get more data, more information. Hey, Jess, why are we, why aren't we doing that? If Carlisle is doing it, we should be doing that, shouldn't we?

Yeah, let's talk. Let's get Dante on the line. I suppose we should. Yeah, we should definitely. Come on. We should. And by the way, I'll knock on the door. Well, I'm going to knock on his door.

I mean, we should do that as part of this work. That would be more. of you. Yeah. Immersive, that's exactly what I did to get to my underlying rate of job growth is average ADP. And it was 50, I think it's actually more, it's 15K, but of course, ADP does not include government. And we know government is down, you know, in all likely. Yeah, right, right. I'm just talking about private sector. Yeah, I just looked at private, yeah. Yeah. Revello, is that private sector too, or is that, does that include government? No, it includes government, but. You can take government out to make it comparable with ADP, right?

So that's what I did. I see. Got it. Got it. Good. Okay. So, Brendan, just to bring you into the conversation, based on all the things you're looking at, where would you put underlying monthly job growth at this point?

If you have a view. Yeah. Plus 20,000. Weekly positive at best. Weekly positive. And Justin? I think I'm around there as well. Maybe even a little bit higher, just depending.

And once we kind of get away from the federal government layoffs, you know, maybe something around 30,000, but again, it's still weekly positive. Well, now that I have it, because I know you've done some work here, how many jobs have been lost at the federal government level and how many more are coming? I think something like 95,000 have been lost. It's in that ballpark. And, you know, October, when we do get those numbers, presumably in November, assuming that everything is back to normal.

Yeah, we're probably looking at a number. other 80 to 100,000 removed from the federal payrolls because back in earlier in the year, when the federal government started offering these voluntary buyouts to workers, it was estimated that around 80,000 federal workers took it, but they were able to stay on the federal payroll until the end of the fiscal year, which of course just ended, which means that by October, they're no longer going to be counted as employed by the federal government. So we should probably see a pretty large reduction in federal government payrolls as a result of that. So you think, would you say how many are going to be lost in October?

Because of the end of the week. My estimate is about 80 to 100,000. 80. Oh, so we could see a pretty significant negative number in the month of October. If I'm correct in the way that those federal payrolls that were kind of categorized as bought out are accounted for that way. Right. Got it. Okay.

Yeah, I think we're between zero and 25 at best. I mean, that's pre-revision. I think with the revision, we're zero, we could even be negative. You know, it's not big negative, small negative. I'll say I base my view on really weak hiring rate in the Jolt survey. Yeah. I last print we got going into this. I mean, that hiring rate's back at like, you know, 2009, like global financial crisis levels.

It's a real weak. Recession level. Yeah. Yeah. Okay. Okay. Okay. So before we move on to the government shutdown,

on and all the ins and outs of that and its implications. Any other private sector data that you didn't mention, Justin, that you think we should be looking at? I mean, there's a whole slew of, you can look at Broadway, attendance, air traffic through the major airports, port traffic through the sea ports. You know, Visa puts out an index. MasterCard puts out an index. J.P. Morgan puts out in Bloomberg puts it. There's like a gazillion. Anything out there that you find a special.

informative and trying to understand what's going on in the broader economy? Yeah, I mean, I will say there are a lot of data sources out there. There are a lot of estimates of how the economy is doing. I'm sure many of them are fine. It probably is just better to stick to the more tried and true indicators that have a good track record of tracking well with the government statistics. So like things like ADP, France, you look at like the just the, general trend in private sector payrolls estimated by ADP and private sector payrolls by the BLS.

It's very close over the long, kind of the long run. So I think that that's helpful. But there is like, you know, just to touch on another data point since we're going to do to get it next week, but probably won't. Chicago Carts data, which is kind of like produced by the Chicago Fed, an estimate of retail sales, X Auto has been pretty good at estimating retail sales. So, you know, just another data point that they, I'm pretty sure they get it from like private sector credit card data. You know, something to keep an eye on as well.

I'll throw one more data point out there. You know, we, you know, for those of us focus on trade, it was a little bit of a bummer that we missed the international trade numbers this week. But we did get the Canadian trade numbers. So we do know that bilateral relationship. So at least have that piece of the puzzle. And we did see Canadian exports to the United States to fall slightly. So it looks to be shaping up that we're still seeing deterioration on trade through August. Got it.

Got it. Mercer, are you any gems out there that you haven't mentioned that we might want to take a look out? I don't know if this is a gem. It's just another data point, right? Because now all these companies are coming out of the woodwork with their estimate of what jobs or the labor market is looking like. I think it was Bank of America said that they looked at their deposits and they can see how many people are collecting U.I. how much UI is going into bank accounts and people losing their jobs. They can see the end of automatic payroll.

And they were, I don't remember what the number is, but they put out a statement that they see that it seems like a lot more people have gotten UI over the past month since they looked at it a month ago. I guess, Justin, that might be consistent with the federal government workers coming off their furlough, not furlough, deferment. right? Because if they start looking for work, couldn't they, or I don't know, what are the rules, does anyone know the rules there? Could they apply for UI? You know, that if, you mean the delayed retirement or the show or the people furloughed from the shutdown? No, the delayed retirement, the 100K or so folks that are going to lose their jobs in the month of October, or they're, they come off. Yeah, I think September 30th was their last payday, right? Could they go on UI after that?

Do you know? Yeah. You voluntarily left? I'm not, it's murky. Okay. Yeah. Okay.

Anyway. Yeah, I'm not sure. And also, I guess there's a real question as like, how many of those workers ended up finding positions in the private sector since taking that buyout?

Because it'd be weird to think that like 80,000 federal workers just sat on their hands from February to September. So even if they were still blocking the check in the federal government. But all this conversation we're having highlights the importance of getting this government data, particularly at this point in time, right? Because the layer market is weak. The economy broadly is on the soft side. And, you know, we got a Federal Reserve that's going to meet here in a couple of weeks to make another decision about interest rates.

And we had the Social Security. We had the conversation around Social Security. the COLA payment. So a lot going on here. We're just not getting any data because of the government's shutdown. But let's now turn to the shutdown. And Justin, can I ask you, what's the state of play here? You know, we're sitting here on Friday, October the 10th. I think what, how many days in? Are we now 10, 11, 12 days? 10 days in to the shutdown. What's the state of affairs? And, you know, how do you handicap how this thing's going to play out? Right now we're gridlocked. I mean, there's the Senate.

has gone home for the long weekend after voting pretty much every day on two bills, one being the continuing resolution, which would basically just extend existing or previous funding for the next seven weeks on November 21st. That passed in the House. That's the GOP-backed bill. That's been voted on every day. Keeps failing. It needs 60 votes.

It's getting at most 54 right now. The Democrats have also proposed their own bill to extend funding until the end of October. that would do a host of other things in addition to extending current funding levels for, you know, four or so weeks, which would include a permanent extension of the expiring ACA premium tax credits that will expire at the end of this year. And also some repealing of the Medicaid funding reductions in the one big, beautiful bill, and then putting some limits on the executive branch from rescinding Congressionally approved funds. Those last two are basically non-starters with Republicans.

There's probably some room to negotiate on the ACA premium tax credits. But that's where they're gridlocked right now. There's not really been at least any public meetings or some conversations about behind, kind of behind the door talks about some, you know, negotiating some of these things. Republicans have basically said that they'd be willing to negotiate on the ACA subsidies after a continuing resolution is passed, but they will not talk about a permanent extension in a short-term funding bill.

And so that basically leaves us, you know, stuck right now where Democrats, Republicans just aren't really talking to each other. There was interestingly, you know, not to ramble on too long here, but there was interestingly a show of bipartisanship last night when the Senate approved the National Defense Authorization Act for fiscal 2026, which kind of sets a budget framework for the Defense Department. So that was, that was pretty interesting. It doesn't do anything for the shutdown, but at the very least shows that, you know, maybe

there could be a bipartisan compromise coming soon. We just haven't seen that yet on the fiscal 2026 budget. You know, the thinking, at least my understanding of the thinking, has been that the, that the Republicans and Democrats would come together by October 15th. That's next Wednesday, I believe. Because that's the day the military gets a paycheck. And if they don't get a paycheck, that would be politically untenable. And the parties would at that point say, okay, let's figure this out.

Let's help and reopen the government. Does that still, and I think that's kind of sort of been our baseline thinking, you know, what we've incorporated into our own projections of the most likely scenario. Are you still holding to that, just? do you still think that's the case? That is our baseline. Our baseline was for a two-week shutdown with reopening forced by the military pay being provided.

I think that that still is a reasonable expectation, except for the fact that now the Senate has gone home, so it makes it a little bit more murky, though certainly they could be called back in for a vote. The thinking around that is that military pay misses have never happened for a shutdown. They've always found a way to either reopen the government or fund military paychecks when there's been a lapse in funding. So it's really hard to see if either they jump over that deadline of October 15th and don't provide paychecks to the military, or they pass a bill that is only to provide military paychecks and nothing else.

It becomes very hard to see what the end date of this is, you know, what would be the next forcing mechanism. You know, on the one hand, there's, you know, today is a payday for federal employees. They're going to get a partial paycheck for work done largely in September by October 24th. That's going to be their first full paycheck missed. And so, you know, that could be the next forcing mechanism. But, you know, and then after that, November 1st is when open enrollment for the ACA starts. So that could be another. But it becomes very hard to see, you know, what, if not October 15th, what is the date?

that Republicans and Democrats say enough is enough, let's reopen this government. So for now we'll stick with the baseline, but after that, the water just become very murky. What do you think, Brendan? I mean, what do you think of our baseline assumption about October 15th and what happens if we blow through that? And do you think we will blow through that? As you mentioned, it's a major roadblock guardrail, whatever you want to call, you know, the Rubicon to cross here. As Justin noted, you know, it's very politically perilous, I think, to not pay armed service members. That being said, since the shutdown started, my, I think my view is that, you know, the, this may go on for longer than we previously expected.

The risks are clearly leaning towards a much longer shutdown. down. I think, you know, that reflects, you know, sort of two facts. One is I think that the Democrats believe that their hand or their position is growing stronger, that they have some traction with this ACA premium subsidies issue. Because we have the November 1st enrollment, because it has this urgency, because we're talking about health insurance premium increases, that's very visceral for a lot of households. They're getting traction with that. I think the other problem is that

I think Republicans' original position that, you know, we just want to pass a clean CR. Democrats have used that argument before. It's very effective. You know, it's like, hey. CR continuing resolution. The continuing resolution, yeah, which basically says, you know,

let's just keep the government open under, you know, current budget and let's like work this out. And the Democrats have used that argument very effectively in previous shutdown. downs against Republicans. As I've thought about, you know, we've talked to this, but I've thought about it more and more. And I think the trouble with this strategy is that a clean CR is an argument for, you know, business as usual. We should stick to, you know, the orderly process.

But, you know, the way, the way Trump, you know, sort of prefers to operate, you know, I guess, you know, not, you know, not, you know, not for of obeying the typical like DC norms or he seems to, you know, to his own credit, you know, inject volatility into a lot of debates and, you know, sort of ride that volatility. So I think trying to make this argument that, you know, we need business as usual is hard when, you know, on the other hand, you have Trump saying, you know, oh, if you don't agree with me, you know, Russ Vote and I are going to, you know, fire, you know, huge portions of the federal government. It's, it's, it's, there's a contradiction there. And then on the other hand, you have the Democrats, this argument about the premium subsidies. And they've kind of worked themselves into a position

where they can't back down. Because you see sort of, I think, this consensus building amongst Democrats that, you know, if we don't stand up now, you know, when, when would we ever stand up? So I think that, that's sort of the point Justin was getting at is we're not seeing any progress towards, you know, any resolution because the public polling still pretty even, you know, both sides still feel like they have like the upper handiveness, like they could win the debate. So, you know, potentially, you know, leaning towards a month-long shutdown. But it's Justin said, October 24th then becomes the next biggest deadline. Because that's when all federal employees would miss a paycheck.

And then after that point, you start to become worried about, you know, essential workers not showing up to work anymore. That sort of creates another forcing mechanism like we had before with, you know, TSA, screeners, you know, not showing up to work, you know, you worry about airplanes and airports functioning properly. Those sorts of issues start to come to the fore. I've got a, I'm going to opine here in a second, and I'm taking everything you're saying in and incorporating that into my thinking. But before I do that, Mr. You have a view on this in terms of the October 15th baseline, the end of the government shutdown or whether it'll

Not particularly. I mean, I think it, I think the baseline makes sense. I also think they could just agree to pay the military and nothing else. And that seems like a very plausible situation too. And then as Justin said, then it's not clear where it ends after that. Well, my sense is the odds are that we're going to blow through October 15th. I mean, it just feels like to me, the Democrats have, they have an issue that's resonating. You can see it in the polls. You know, people want to be able to hold on to their help, the ACA subsidy. And this is also in the context of the Medicaid cuts. That's also got people, you know, very nervous, you know, about future insurance for lower income households.

And I think it's resonating. I was, uh, I was in Florida, speaking at a number of different functions. You know, it seems like everyone goes there for Orlando. I was kind of in Orlando region. for a few weeks. And I was in the car going to one of the speeches and listening to a talk show, a local talk show. This is Florida, right, Orlando. And the people that were calling in were very, very nervous, angry, upset about losing those subsidies. And they had done the calculations. They go, my premium is X. If this happens, my premium is going to be Y. And I'll tell you, I can't afford that.

So I'm going to go without health insurance. And you could feel kind of the angst and the anger building. So I think the Democrats actually have something that resonates. And then the other thing politically, and here I'm an economist playing political interpreter or operative, but I'll do it anyway because we have to come up with an assumption. I think when the president starts saying that he's going to fire all these government workers, or, you know, that this is an opportunity to make big cuts in the government employment staff. I don't know.

And then also cutting funding for different infrastructure projects to Democratic states like New York and California. I don't think that works, you know, politically. I think it does just the opposite. At least that's my sense of it. It gives the Democrats, you know, further justification for kind of holding on here. So my sense is this thing is going to blow past October 15th. And as you say, Justin, after that, it's not clear. I think the forcing mechanism is something's got to break.

You know, what happened in 2018-19, that was the longest shutdown in history, five weeks under President Trump in his first term. I think the narrative there, and I think it's correct, that what brought that to an end was air traffic controllers just weren't showing up for work. TSA workers weren't showing up for work. So people, you know, their flights, were getting delayed or canceled. The air traffic system was getting mucked up.

Things were breaking. And that's what forced President Trump's hand and that caused him to settle on the shutdown. That's what's going to, I think, going to have to happen here. Something is, we're going to go to a place where something is going to break. And that's when it's going to force the hand.

And that could take some time. That may, that's not two weeks. That may not be even four weeks. That could be, we could set a new record here, five, six weeks. I don't know. What do you think, Justin? Does that, does that resonate at all?

Yeah, I think that that's exactly the sentiment that that I have been kind of carrying the last couple days. I mean, there's there's a couple near-term things that could be a breaking point. Like, for instance, there's already a ton of flight delay. So it could be that the FAA concerns mount a little bit more quickly. Of course, the OMB director, who Brendan mentioned earlier, Russ Fott. He has, I'm sorry, actually, it was the transportation secretary, Sean Duffy, had said that if any FAA workers walk off the job, you know, for for unqualified reasons, then they'll be fired. The problem with that is that like, we need FAA workers, you know, that's just not like something we can,

you know, the government can really handle. It's too, it's too painful. And so, yeah, I think that that could be a forcing mechanism. I'm flying on Wednesday and I do not want my flight, my, my flight delayed. And so, you know, hopefully, hopefully, you know, even for my own interest, like, you know, I can feel myself getting more tense about my travels. And I think the more that the government stay shut down, the more stuff like that's going to happen. Another thing to be to keep in mind are actually two federal welfare programs. Can I say just in? Oh, sure. Go ahead. I'm traveling a lot on airplanes and I wasn't tense until you said you're tense. Now I'm tense. Oh. Well, it's funny. I was okay until you said that. Yeah. I know.

I've had I've had I've had a couple of colleagues reach out to me here at Moody's saying I need you expertise when I'm traveling soon. When is the government shut down happening? I'm like, well, man, now I'm really having to put my, my, my, my, my, uh, my confidence in our forecast here. No, it's okay. There's, there's, there's actually another, another thing that keep in mind. And I was looking at this this week. The, the nutrition assistance for women, infant, and children with the WIC program, who, you know, a fair number of Americans, millions of Americans rely on that funding actually dries up in just a few days. They don't have, all those benefits will start to end, probably by mid next week.

And there's been some talk of state stepping in to fund the gap, but that's not sustainable. And not every state can do it. And then the Trump administration has suggested they might try to backstop the program with tariff revenue. That's legally dubious. And so, you know, that's another potential issue that might result in some, you know, in Congress getting together to extend funding. And then this is a longer term thing, but by December, SNAP benefits are going to run out because the contingency fund is going to dry out. And now we have, I think it's like 40 million Americans are on SNAP. Snap is food assistance.

Yeah. That's right. Yeah. That's right. Yeah. All those food stamps that people get. I think like 40 million Americans rely on these. So all of these things are going to start boiling up and increasing the pressure cooker on lawmakers to get together, which might result in a deal that extends.

the ACA subsidies, but I actually think that the Democrats have a reasonable off ramp here because even though right now the president certainly could throw this whole thing for Republicans by, you know, saying we're going to lay off all these federal workers and we're going to cut all these Democratic funded projects, that could happen. But at the end of the day, it's still a Democrat that are demanding something that is not currently in law. Republicans just want something that's clean, which, as Brennan said, Democrats have always supported for continuing resolutions. So if Republicans can keep their messaging together and allow for these pressure cooking events to occur, and also at the same time, maintain their promise to Democrats that we will actually negotiate with you

and allow for a floor vote on extending the ACA premium tax credits, then the net provides Democrats an off ramp to avert any blame that might come their way as all these things start breaking by saying, okay, we got what we wanted. We're actually going to get a vote on the ACA premium tax credits, and we're going to, oh, we open the government. So that's one way this could play out. Got it. Got it. Okay.

So let's talk about the economic consequences of all this. And kind of the way I've thought about it is if it's a week or two, which has been our baseline, you know, by October 15, no big deal. You know, we've been down this path many times. You know, when people are going to get paid, rough, paid on time. You know, there's no upside to it for the economy, but the downside here is probably doesn't even show up in the data to any significant degree. If it's three to four weeks, and by the way, that is increasingly less likely, it's one to two, but, you know, that's the kind of the impact. Three to four, it becomes a deal. You know, people aren't getting paid, right?

And, you know, that's got to have for some of those folks that don't have a lot of savings or other financial cushion, it's going to have some impact on the way they behave. And they, of course, they don't know how long the whole thing's going to last and how long it's going to be before they get their next paycheck. And they may be worried that they might get fired, you know, that the administration has threatened that. So they're going to become much more cautious than their spending. And then contractors, federal government contractors that service the federal government, they're not doing their work and they're not getting their pay. They're not making revenue. They're going to start cutting jobs.

And it starts mounting. We start getting some macroeconomic companies. It starts showing up in the data. If it's more than a month, then it's a deal. Because at that point, things do break. something government services just aren't going to get done. We talked a lot about TSA because, you know, we're personally affected by that, but we're talking about lots of stuff. NOAA tracking those hurricanes coming across from Africa, FDA approving, you know, pharmaceutical plan, SEC doing the paperwork necessary.

You know, on and on the parks that are closing, so forth and so on. and all those other sources of income support that aren't getting like the WIC program, you know, where it's not getting paid. That's a deal, and that becomes a macroeconomic problem. Is that, let me turn to you again, Justin, because I know you've done a lot of work in this area. We've done a lot of work together in this area, you know, going back a few years. Does that sound about right to you the way I just articulated it? Does that make sense to you?

Yeah, that's entirely correct. I did some modeling a couple weeks ago where, you know, if the government is closed for two weeks, it shaves about 0.3 percentage point, little less than 0.3 percentage points off of annualized real GDP growth. That's largely from productivity losses. You know, you stop work for two weeks. You know, you have some, some losses to productivity. But you're right. You get into something like a eight-week shutdown, 12-week shutdown. Now we're talking about, you know, extreme productivity losses. disruptions in the private sector, federal contractors having to lay off primarily kind of their hourly workers as their cash flow dries up. I think though we haven't really seen this too much in previous

shutdowns because they've been pretty short-lived. You start getting consumer, you start responding by losing confidence, investors revolt. And there's, you know, some more turbulence in stock and bond markets just from the pure perception of political dysfunction and then all these other disruptions that you had mentioned. So yeah, I mean, these consequences can become pretty big, pretty fast if this endures for a sufficient, sufficiently long period of time. That's a good point. I mentioned the financial market effects. You know, at some point investors are stock bond investors who are going on. This is going to have macroeconomic consequence. You know, what does this mean about governance and the ability for the government to do the most basic

thing? And that's keep the lights on. I mean, what does that mean? Brendan, anything to add here in terms of the economic consequences? Yeah, I think you noted it that the macro consequences and costs, I think, start become much more nonlinear after one month. As you point out, like the first two weeks, like almost don't even matter because it's almost like everyone's just on vacation. But then the first miss paycheck happens. And I think as you point out, like, if you use credit cards, you can sort of smooth things

out, you know, like, get. But then you imagine, like, you know, what happens on November 1st? For a lot of people, that's going to be like rent and mortgage payment. That's going to be a big one. And if they have like no money in their checking account, you know, now it's really starting to like squeeze that. And I think if we look at, you know, we've made a lot of comparisons to the previous shutdown that went, you know, 34 days.

We should mention the key difference there was the military members were getting paid during that shutdown because the defense department was authorized. So that is part of the reason it went on so long. But the fact that it sort of just went past 30 days, that's when you really start into the problem of, you know, now federal employees have missed two paychecks. So now they are starting to look for other jobs. And that's why you see a lot of those like TSA folks were leaving. And it's probably not a coincidence that, you know, that I even verified today, that is one of like the lower paying positions on like a federal pay scale. So I think you particularly worried about,

you know, sort of the lower end of the salary spectrum, like those people jumping ship first. And that's really where you start to see, though, the second order of X in that to start. option. But if I was going to draw a historical parallel, it feels to me like this is the closest to the 2013 shutdown when, again, the battleground, the policy debate was health care. At that time, it was about, you know, the Republicans were trying to delay the ACA. Now it's about actually the Democrats trying to enhance the ACA. A president who had just started, you know, incumbent presidents someone who just started their second term. I was looking, you know, consumer sentiment was extremely low.

I think that also plays into it because, you know, as the opposition party, you think maybe I can use that negative sentiment. There's a lot of negative feelings about government economic policy right now. You can try to play that, you know, against Trump. That shutdown went for, I think it was like 16 days or something like that, a little beyond two weeks. And I think that sort of gets back to my baseline assumption here is that I, I think we're certainly going to blow past two weeks, but to me, I really struggled to think

we're going to blow past like 30 days because of those macroeconomic consequences we're talking about. Because, you know, you rattled off a few, but, you know, the list goes on and on and on. Like federal home loan bank, you know, they're not processing, you know, mortgage, you know, FHA-compliant mortgages and things like that story. There's all these different sort of parts of our economic system where the government, you know, facilitates market operations, market activity. And when that stops, yeah, it could get ugly really fast. Yeah, Brendan, you use the right word.

I think it's nonlinear, the economic consequences. And actually, just in the simulations you ran with our model of the macroeconomy, they're not nonlinear enough. It's a linear. The models tend to be more linear, meaning, you know, if it's a two-week shutdown, that has the same impact as a shutdown that lasts, you know, three to four weeks, about five to six weeks, it's about a tenth of a percent, you know, per week that could shave off in the quarter of the shutdown. I think the model isn't getting it quite right. My sense is one to two weeks, basically zero,

you know, no big deal. It goes three to four weeks, then it's about a ten, you know, you're shaving a couple, one to two tenths of percent off per week of a shutdown. After four weeks, it's big time. It's, you know, we're talking, you know, much larger. consequences to Brennan's point about the disruption. So we've got the model results and I think they're, you know, obviously very useful and keeps everything consistent. But it feels like this world, particularly this world around the shutdown is much more nonlinear than that, to Brendan's point. Well, and just to go back to our conversation at the start at the start of the podcast with, you know, the Federal Reserve being in this monetary policy transition, at a certain point,

they're going to be flying blind. And then these, the risk of a monetary policy misstep just goes even higher. And so it's, it's like that even adds more to the equation about how bad this could get. And let's end this conversation around because I want to go play the stats game. But before we do that, Marissa, let me turn to you. You know, it's what happens if the government stays shut down through next week? Because next week is, it includes the 12th of the month, right? This coming Sunday is the 12th. If that next next, week, next week is when the Bureau of Labor Statistics conducted survey for the payroll and household employment numbers for the month of October, if we're shut down, that's not going to happen.

So what happens after that? I mean, are we, is it possible that we're going to actually never get data for the month of October 2025? Is that a possibility? It's possible if the shutdown were to go on long enough, I think. So also, going back to the 2013 shutdown. That was also a shutdown where we didn't get government data. We didn't get a jobs report. It bled into the survey reference period. I think the CPI was also delayed then as well. So I think what they have done in the past is sort of just retroactively do the survey. I think we talked about this a little bit last week too. With the payroll survey, you can do that because most of it's automated, you're getting automated payroll records from company referencing a certain date.

No person has to recall something, right? On the household survey, that's different because you're calling people up and you're asking them about their activities during a specific time period. And as you, as that time period gets further and further away, people have recall difficulties, remembering what they did. On the CPI, same thing. People are out there collecting. data on prices. Now we know that's going to happen, right? We know that that'll happen for this month because the White House called the people working on the CPI back, as we talked about at the top of the episode, because of the cost of living adjustment that has to happen. But yeah, I mean, you could have, you could have very delayed reports, which is probably the most likely.

If what we're saying is that the government is shut down for most of this month and then reopens, I think you'd have a delayed job report. If it went on longer, something like we haven't really seen before, then yeah, you could actually miss a month of a jobs report. Right. Oh, go ahead. Oh, I was just back to the Fed. You know, I was thinking about that. So it's likely the Fed meets October 28th and 29. That's their next policy meeting, right? So it seems like they may have a CPI number because of this, you know, edict to bring back workers on the CPI. But they almost definitely won't have a jobs number.

So they're going to be doing what we're doing. It's looking at alternative data sources. And I wonder would the government, if the government is not open on October 28th, 29th, will that factor in to their decision about the trajectory of growth or how the economy is doing? Interesting point. Yeah. Great point. I mean, if anything, they're cutting rates, it just argues for continue to cut rates. I mean, markets expect a rate cut on October 28, 29. So they'll more likely deliver if the government shut down for sure. Yeah. And I think I saw Matt Collier's estimate of CPI for this month, and it's more benign. I think the core CPI is coming in.

It's going to round down to point two as opposed to round up to point three. If that's the case, that would also give the Fed more latitude to cut rates as everyone expects. So this, I think all this, all everything is coming together to suggest that the Fed's going to cut rates at the end of the month. I was going to say on the point of inflation, it does get tied back to this discussion about the ACA premium subsidy. I raised this point to you earlier, Mark, in a previous conversation, but back in 2023, when they implemented these premium subsidies, the way CPI handles medical costs, they're only measuring your out-of-pocket costs, which is where the CPI works. And these subsidies, when they hit their sort of peak effect in late 2023, they took

0.3 percentage points off of top line CPI. Wow. One of the things is like if these subsidies go away and then it whipsawes the other way and adds another point three on top of CPI and you know 26 Q1. Yeah. Yeah. That's right. It's transitory, but you know, it's going to be there and people are going to, you know, people are going to howl about it.

You're going to feel that, right. I mean, judging by the radio call-in show that I was listening to. They're going to notice for sure. They're going to notice for sure. Okay. Bristin, did you want to say anything else before we move on? I just wanted to ask a question. You know, President Trump is also talking about the possibility that federal workers would not get back pay.

Ah, right. So, I mean, all these assumptions that you're making, Justin, right, the modeling you're doing and the economic impact is based on the assumption that they do get back pay because that is the law. do we think there's any possibility that that that could actually happen? In my opinion, no, for two reasons. One, because of the reason you just stated, it's against the law. It's actually a bill that was signed by President Trump in 2019 during that shutdown that would guarantee that all federal furloughed workers and those who worked without pay would, in fact, receive compensation for the period of which the shutdown lasted.

But then also when impressed about it, most Republican lawmakers and including Senate Majority Leader John Thune and Speaker Mike Johnson of the House, they basically heard that. They're like, well, we'll probably give federal workers back pay. And so they seem to be much less warm to that idea than the president is. And I think that's kind of like what has been part of the messaging problem in the Republican Party is that the Senate and the House. House have largely been, you know, kind of unified around this, this, you know, clean continuing resolution. Let's not, you know, break off too much from that. And then in the White House, you have all these kind of threats being levied left and right. And I think it's making some of Republicans in the Congress get a little bit nervous that the president might throw them

off their messaging and, you know, kind of lower their leverage relative to Democrats. And so, to answer your question briefly, I don't think it's going to be an issue, certainly a risk, but I think a low one. I just wonder if you're a federal worker and you're hearing this, right, back for like what your actions will be. I mean, if you think, well, I might miss a paycheck on whatever the next paycheck you said was, right, the full one that they would miss. I might miss a paycheck.

And now they're saying I may not ever get that paycheck. you know, that could change consumer behavior. That could make people much more willing to just leave and look for another job altogether, too. True. Sure. Hey, let's move on. In fact, I don't think we've ever ended the podcast with the game, the stats game,

but I think this is going to be the time that actually happens because we've already gone on for quite some time here. In the game, you guys want to play the game? Everybody up for the game? Sure. I would suggest we let Brendan and Justin go since their guests first instead of me. No, we always start with you, Marcia. Yeah.

Their guests. What do you guys think? You guys, yeah. I'm always a fan of sticking to a tradition. Yeah, it's tradition, tradition. Yeah, let's stick with tradition until we decide not to. I think it's premature. Maybe a few years from now we can break from tradition.

So the stats game, we each put forward. a stat, which obviously is going to get a little harder because there's fewer stats out there, but we used to before it a stat. The rest of the group tries to figure it out with clues, questions, deducted reasoning. The best stat is one that is not so easy. We get it immediately. One that's not so hard we never get it. And if it's apropos to the topic at hand, although it doesn't have to be because we're kind of limited here, all the better. So with that, Marissa, no, you know what? Let's break tradition. We're going to do it. We're going to do it. Like, oh, this is so painful for me.

Oh, my gosh. But we're going to do it. We're going to break tradition. Justin, you go down. Okay, we should. All right. Okay, okay. My stat is 8.1.

8.1 percent? No, say, what are the units? It's a level. It's a level. 8.1. Is it, when you say a level, it's not like months or something. Dollars? It's not months or dollars, but it's closer to months.

Years. Days. Days till something happens. No. Days since something has happened. No. No, the average length of a government shutdown is. That's right it is.

Yes. All right. Yeah. Yes. We're now across that threshold. We're at 10 days. Yes. The average days of previous.

government shutdowns. And how many have there been, Justin? There have been. I don't have this number off hand, but I do have it in front of me in a chart. I think I want to say 20. 21st shutdown since. 21st, yeah. Yeah.

So, like, there are some years where there was multiple shutdowns in a year, but that were kind of short-lived. And so, y'all together, we get the 21. And the longest in history was 2018, 19, 34. days. That's right. 34 days. And that was a partial shutdown.

Yeah, that was not a full government shutdown. Unlike today, we're an entire government. Actually, just to point things out, I mean, this is a full shutdown. The 2018-19 was a partial shutdown because the government had already appropriated as we talked about defense. And I think a couple of other departments that got their money. The other thing was that was at the very end of the year going into the 2018 going to the next.

So it was during a holiday season. When work is already, no one's doing any work anyway. Here we're in October, and this is like, you know, people are doing stuff. You know, this is the, yeah, at least, at least I'm doing stuff. Presumably. Presumably. Presumably, they're doing stuff. You know, they're harvesting the pumpkins.

I don't know. That's right. Yeah, that kind of thing. I was going. All right. Brendan, you're up. All right. $350 billion.

$350 billion. That's the cost of extending the ACA premium tax credits. Oh, wow. Wow, you guys know your numbers. Yeah, that's what we're talking about, about $35 billion a year. Over 10 years. Yeah. Yeah.

And maybe if we could use the tariff revenue to pay for it. What do you think? I mean, right now we're on pace. We're going to get about, I mean, $300 billion in tariff revenue. We've already earmarked about $15 billion for the soy board. soybean farmers. Is it 15 billion for the soybean farmers? I think that's what they're talking about.

Yeah. Yeah, 350 billion. Okay. That's just maintain the current ACA premiums. Yeah. Yeah. Right. Okay.

That's very good. Good. Good. Not as good as Justin's, but you know, pretty good. Pretty good. Yeah, obviously not. We never would have gotten it. I was thinking.

I thought it was like cost per day of a shutdown or cost per week or something like that. $350 billion? Oh, that'd be huge. Isn't it per week? Isn't it something like that though? No. No, no. Week?

No. No. Nominal GDP is 30 trillion. So $350 billion is over 1%. You know, it's more like $10 billion, you know, something like that. Right? It's the estimate of 0.1 percentage points of GDP per week. Yeah.

is correct. It's 30 billion, but it could be less than that, too. 30 billion, right, right. Mercia, you're up. Okay, ready? Yeah. $1 trillion, $29 billion. $1 trillion $29 billion?

Yes. Is it related to the budget? Yeah. Interest payments on the debt. That's right. That was the interest payment on the debt for fiscal 25. CBO just released their. fiscal 25, right, review. So after Social Security, that's the biggest line item on

expenses for major programs. So for the first time ever, we're over a trillion dollars. Yeah, for the first time ever, right? That's up 80 billion dollars from the previous fiscal year up 8%. So it was just under a trillion dollars in fiscal 24. Wow, wow, wow. So, yeah, that's more than we spend on the military. It's more than we spend on Medicare or Medicaid individually. Right. As we record this, we're going to get the final monthly Treasury statement this afternoon. So we'll get the full fiscal year.

And again, it's looking exactly the same as last fiscal year, two trillion dollar deficit, right on the money. 6% of GDP, something like that. A little bit more. And the primary deficit, excluding those payments? interest payments? What is it? So I think it's like 3% of GDP, isn't it? Something like that. Yeah. It's half of the, half the deficit. Yeah. Yeah, right. Exactly. Yes. Exactly. Tricky how you did that. Wow. Very impressive. Yeah, very impressive.

Okay. I got a stat, you know, to mix things up. It's just a hint. It has nothing to do with the government shutdown or the budget deficit. It has, it has every, to do with alternative data that we're looking at. And the number is 9.04%. And I can give you another hint that would be very helpful. Do you want to take a crack at? 9.04%. Is it employment related or labor market related? No. No. Is it CPI related? Is it credit? No. Credit related. Credit related. Credit-related. Subprime delinquencies. No. No. Is it the increase in credit over the month? No, student loans. Student loans, 9.04%.

Highest ever. They've jumped again in September. That's outrageous. That's, you know, very high, incredibly high. It's double what it was, you know, back in, you know, in more typical times, like in 2019. We used 2019 as kind of a time, a benchmark, you know, a time when things were reasonably okay and credit quality was reasonably good. It was, I think, four, four and a half percent now at nine percent. And now obviously representing a lot of stress. And I, you know, I bring this up in the context of, you know, the alternative data. We get the data, we've talked about this in the past, data from Equifax, the Credit Bureau,

and see from the credit files, you know, exactly what's going on with delinquency and outstanding and you can break that down by scoreband and lots of other different cuts. And you can see the stress there. Here's another really amazing statistic. And thank you, Justin, for saying me the data last night. For auto loans, subprime auto loans. So these are auto loans made to borrowers with credit scores or vantage scores of below 660. So that's the score.

The typical, I think the average score is like $7. 7, 10, 720. So 660 and below, the average delinquency rate on those auto loans is about $450 billion in outstanding. Year to date through September is exactly 10%. 10%. And, you know, again, very, very high. And the highest, even higher than what we saw in the great financial, global financial crisis, GFC. So there's a fair amount of stress out there, you know, particularly in the kind of the subprime, you know, area for lower, lower middle income household. Okay. Anything else, guys, before we call it a podcast? We cover a lot of ground. Alternative data sources. We talked about the government shutdown. We played the game. I wanted to talk a little bit about the tariffs, but maybe we'll come back to that next week. We'll get you back on, Brendan, soon as we'll talk about that. I'm curious what your odds of recession are now, Mark.

I put them at 40%, you know, somewhere around there. Yeah, very consistent with our model. You know, we have that model, the kind of a leading indicator of probability recession over the next 12 months. And I think it's sitting at, well, last time we ran the model was sitting at 42%, something. So you told me 40, I guess, you know, the GDP data is coming in stronger for Q3. You know, we didn't get to trade data today. That would have been an important variable to get. but I think the Atlanta Fed, our trackers coming in strong. So, you know, that brings up something we should talk about in the future.

It goes to productivity. We're getting all this GDP growth, but we're getting no job growth. So what the heck is going on? You know, how sustainable. Who's going to win that battle? Is it going to be GDP or jobs? I mean, that's kind of the other way of thinking about this. But I, you know, I say 40 shaded, if I'm wrong, shaded to lower probability.

What about you, Marissa? I think I'm down to about a third, 35%. Yeah. Yeah. Makes sense. Justin, do you have a probability in mind? Between 30 and 40% for, you know, about two months or so now. See how he phrases that.

It's like, I've been more right than you guys. I've been there for months. I've been there for months. I knew it. Well, we don't know who's right. Yeah. So. Of course, even if you're right, I'll,

You know, I'll make sure that I'll say you're wrong. So it doesn't matter. Yeah. I'll find some way. Brendan, what about you? Do you have a probability of recession? Oh, I'm always the pessimist. I'll take the highest odds of the group.

45, put it away. Okay. All right. Well, that's your Canadian prism you're looking through. Yeah, there you go. All right, guys. Well, thanks so much. We'll have hopefully Dr. DeRudy's back here, you know, next week.

If he doesn't get caught in Bermuda because of the hurricane or air traffic control or whatever it is. Good to have you aboard, Justin and Brendan. Always a pleasure. And thank you for all the information. And with that, dear listener, we are going to call this a podcast. Take care now.