Moody's Talks - Inside Economics - Resilient Job Market and Remote Work Part 2

Episode Date: November 25, 2022

Nick Bunker, Economic Research Director for North America at the Indeed Hiring Lab and Adam Ozimek, Chief Economist at EIG, discuss the state of remote work and the economic implications.Full episode transcriptFollow Mark Zandi @MarkZandi, Cris deRitis @MiddleWayEcon, and Marisa DiNatale on LinkedIn 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 this is part two of the podcast. We recorded a couple of days with Nick Bunker, Adam Ozemeck, and the team. We focused on the job market and the last podcast. This podcast, we're going to be focusing on remote work dynamics, something that Nick and Adam have spent a lot of time on. So I hope you enjoy the conversation and we'll pick it up here. But let's turn to remote work. And I know both you, Adam and Nick have done a lot of. lot of work in this area. And I know, Nick, I mean, Adam, you're, you're definitely a remote work. I'll call it a proselytizer, you know, someone who's all in remote work is here to stay. It's a game changer. And it's, there's a lot of cross currents, but on net, it's a definitive positive for the broader economy. And Nick, are you in that camp? Are you a proselytizer as well? Or are you kind of, I don't know where you stand exactly on this? So I'm definitely of the camp that it's like it's here to stay.

Here to stay. Here to stay. The, the extent in the extent in for who it's here to stay for or the speed at which more people have access to it, I think maybe, and I don't want to

mischaracterize Adam's tuition there, I think maybe I'm less of a remote work bowl or sort of like have less of an optimistic outlook but, so I think it's definitely here to stay. I think it just might be here to stay for a smaller subset of workers than some people think. Yeah, I guess that depends on the technology too and how fast that changes and so forth and so on. Is there data that you look at at Indeed that gives you this

perspective on why you think remote work is here to stay? Yeah. So, I mean, the main thing that we look at is job postings. So looking at the text of job postings to look at the rate at which those job advertisements advertised remote work. And it's a pretty expansive definition of remote work. And we've been publishing a series that looks at essentially the beginning of 2019 through October, so Halloween of this year, October 31st, and all November data when the month ends. But prior to 2019, the average share of postings on D that mentioned or advertised remote work was about 2.7%. and then that jumped dramatically in the spring of 2020.

And it hit its peak of about 10% in February of this year and has come down. And now it's closer to eight and a half as the end of October. So there's been some pullback there. But some portion of that can be explained by the fact that the sectors that have seen the biggest pullback in job postings this year have been the more the sectors most likely to. To tech-related kind of. Exactly. So software development is, you know, one category on our site.

Those postings have come down dramatically this year. And they're also, you know, the sector most likely to advertise remote work. But what's interesting is that as that has come down, you know, the sheer number of postings in software development on indeed, the rate at which software development job postings, advertise remote work, sell flat. So it's not as though employers are, you know, when they're pulling those, it's not as though they're disproportionately pulling down the remote postings or within their postings they do have substituting them away. It's just that it's mostly, you know, at least for that sector, a composition effect, where it's just the number of those postsings,

that sector's coming down and not employers aren't rethinking. At least when it comes to advertising remote work, their decision there. You've got to give us the fixed weight version, Nick. When are you guys going to do the fixed sectoral weight version? I mean, maybe that's a Christmas vacation project. No, I'm kidding. That would be Christmas for everybody. I'd love to see that.

Yeah, to control for it. Two questions. One is, when you say remote work, do you mean full remote work? Or is that also hybrid remote? It is both. So it is an expansive definition. And Adam was asking for the fixed weight, but I think the thing that we're working on currently

is a better understanding of hybrid and non-hyber remote work. It's like better measuring that and teasing that out in the data series that we share. So if you went from two, I'm making this up roughly, 2, 10, 10%, 8%, what is the remote work, the full remote work share? Is it half that? Is it, you know, what is that? What is that? Do you have a sense of that?

So don't have a precise number in part because that's what we're trying to figure out. Yeah. Yeah. But I think my sense is that given what we're. we see in other measures of remote work, it's mostly hybrid. So the sectors that are like fully remote, that's the minority, I think pretty highly concentrated in sectors like tech, so like software development jobs. You know, caveat here that or sort of personal bias is that I work at a technology company,

I'm fully remote and have been for years. And I think, you know, earlier I said, you know, you look pretty healthy too. You look very healthy. It seems to be working out for you, okay, this whole remote work thing. You notice, you see that, Marissa? Look how good he looks. Yeah. Looks great.

Yeah. Very sporty. Yeah, very sporty. Thank you. Yeah. The floor of sunshine can be wonders. I was wondering where you were because you look too relaxed. I mean, yeah.

You're in Tampa, aren't you? You're in Tampa, I think. Yeah. St. Pete. St. Pete. It's just across the bank.

Right. Yeah. See how he's even gotten that down now. I live in St. Pete. I don't really live in Tampa. That mostly comes from the fact that, so we moved to St. Pete because that's where my wife grew up. And there's like a big, like, if you're from St. Pete, don't know, not Tampa, you know, like. No, no, I hear you.

Like, yeah, in the Philly suburbs, I go three miles, you know, west of here. That's not where I live. I don't live over there. Yeah. So, yeah. Yes, very specific. One other question, you do have international operations. Is the U.S. unique?

Or is this typical across the world, these kind of percentages for remote work? Yeah, no American exceptionalism here. Similar similar stories in a variety of markets where you saw, you know, saw a baseline level of postings that advertise remote work. Spring of 2020, they share postings that mention these kinds of roles or opportunities jump and have slowly come down. Again, this is, you know, not compositionally adjusted, you know, fixed weights yet. Thank you for that project, Adam. And then, but, and this is actually, that is some colleagues of mine did research,

did some work with the OECD, and that was like the finding of their research. Was it across 20 markets that indeed has operations in and that we have data on similar trend, restrictions and reductions in mobility, you know, happen in 2020. They are lifted or removed or people start, you know, moving around again in remote posting.

have drifted down, but they haven't, you know, returned back to their 2019 level. Yeah, just my, again, anecdotes, when I was, I went on this global world tour, everywhere I went, it felt, except for the Middle East, you know, in Europe, in Asia, not in the Middle East, it was very much like here in the U.S. You know, people not coming in, they just don't come in the office. They just don't come in London and in Singapore. They just don't. Tokyo would be the other exception.

They definitely go to the office in Tokyo. Yeah, they definitely go to the office. Our team's a global team, and that's been my experience too, like going on Zoom calls with, like, folks in the Toronto office. There's, like, you can just have a meeting in, like, an open area because there's no one there. Same thing with like the one in the office, stuff like that. Yeah. Hey, Adam, because you've done a lot of work in this area, those percentages feel low to me.

I mean, kind of in my mind's eye, I've got this thought that the percentage of the workforce that's going to be remote, you know, high, and that's why I asked, whether it's full or hybrid, hybrid in full, is going to settle in somewhere around 15 to 20%. Is that right? Am I getting that right? Or based on the other data you're looking at? Yeah, I mean, Nick's looking at job posts, right?

And, you know, without industry mix being controlled. So I believe Nick's, if you look at the relative change, that's probably a better, you know, from two to eight, you know, a quadrupling is probably a better way. to think about it than to look at it as 2% versus 8% when you look at the FOIA economy. Right now, actually, we're going to have better data on this soon. The BLS stopped asking its remote work question, which was not functioning because it included the caveat.

Are you working remotely because of COVID? They stopped asking that. And I believe next month is going to be the first month when they have new remote work questions when they ask about in much more detail. So we'll have a better ask them. But if you look across a variety of things. of surveys gallop nick bloom is running surveys um the current remote plus uh hybrid is probably like 35 to 45 percent still substantial with two-thirds of that being hybrid so think of something like

13 percent fully and then 30 percent remote i think is where bloom's estimates currently stand that you have to be concerned that there's there's online survey bias there so When the B.Ls numbers come out, they might be lower than that. But I don't think they're going to be orders of magnitude lower. I don't think they're going to look more like that than the 2% or than the 8% number in their work. So I think you've got, but you know, they also look at employer expectations. They ask employers, what are you planning? And, you know, in their data, the long run is not planned to be substantially lower than where we are.

So like normalization has happened a lot. And another piece of evidence for that is to look at the castle data on the office vacancies. Like that's pretty consistent with like this is it. We're back to normal. You don't have some big return to office shoe yet to drop. It's more like this is at best, this is how it's going to be. And I think longer run as the remote labor market evolves, we're going to see even more full time. Because while things are converging back to what employers want, employees want,

employees want more, right? And so in the long run, it's going to, you're going to have this negotiation between employers and employees, and you're going to have new firm entrance and a variety of factors that I think are going to, you know, technology getting better, labor markets evolving, I think it's going to push us even further into the fully remote camp. Now, at the end of the day, I don't think we're going to end up with more than like 20% fully remote, but that's still huge, right? Like, that's one of five workers.

Okay. Okay, so does that kind of rule of fun I was using feels about right to you, like the 15 to 20% ish where we settle in? I think that's fully remote. And I think another, you know, so. Oh, okay. I think a third of workers, maybe 40% being hybrid. You know, a lot of people are, especially if you look, you know, hybrid, it's like one, you know, if you're doing one day a week, I think a lot of jobs can accommodate one day a week, for example. So two days a week, three days a week.

So I think 30 to 40% hybrid is probably where, all. together, you know, remote, fully plus hybrids were lined up. Got it. We're, you know, we're remote. We're fully remote. At our economics world within the Moody's Analytics organization, everyone is able to do kind of sort of their own thing, depending on circumstance and culturally, you know, what is, you know, felt to be appropriate. But we're, we're fully remote now. Except Chris. Maybe hybrid.

Except Chris. You can go into, we have an office, although no one, I mean, Chris and, I mean, Chris and three other people go in, you know, so, and I'm not exaggerating. It might be 10 other people. I don't know. We, you remember our office at? We have this five-story office building. And at most, we came in fill a floor at this point on a given day. Now, how long until you guys start decreasing your office size? Yeah, there you go. You've got sub-leases already. Where do you think you'll be in three years? What's your office? We're out. We're out. We're definitely out. Whole building gone. Yeah. Maybe, you know, well, you know, we might be a little unique in that we,

Moody's has other office space in, you know, King of Prussia, for example, that's not far away. So we can kind of use that if we need to. But yeah, I think, I think three years from now, we're just not going to, if we're having any space is going to be a shadow of what it is today, shadow of what it is today. Because, you know, people, that's what people want. You know, I'm not, I mean, I'm not, I mean, you know, a lot of folks say, oh, young people want to go into the office. Well, not in my experience, you know, not, again, this is anecdotal.

and maybe it's confirmation bias, I'm not sure, because I do find a lot of value in the work, but, you know, even the young people are all in. They want, you know, they want contact. They want, can we get together, you know, on a regular basis, on an offsite and, you know, maybe a conferences that we put on and you can have team building and that kind of thing. They want that, which I totally get, and I think that makes good, but they don't want to be, they don't want to have an obligation to go into the office, even one day a week. They don't want, they don't want that. Which, by the way, and this is now evolving into, well, what does it mean the broader economy? The one thing it's done for us is vastly increased our labor supply, you know, of opportunities. Because now I got folks that were hiring in California, versus in California, and you were the only one for a long time. And now we've got others because we can't, right? We can't. We got, there's all kinds of HR issues around, well, you know, should they, where should they be? What salary should they be tied to and nexus?

and legal issues and like overseas, if somebody wants to go from here to there, does Moody's have nexus in that country? You know, that kind of, those kind of issues. But we'll work those through. And increasingly, it's becoming, you know, part of the process. So we're all in. Let's talk about the economic implications of this.

When you were on a year and a half ago, Adam, you were making the case that this was productivity enhancing. And I guess there's lots of different ways remote work affects the economy, migration flows, regional economic performances, real estate markets, which we're going to come back to in the context of your work, recent work, but also productivity, which I think is probably the, if you have a different view, the most significant macro economic consequence of remote work is what it means for underlying productivity growth. And you're making the case that it is productivity enhancing on that. And I'm sure you feel the same way, but I've kind of lost track. What kind of is the research out there that we've seen in the last year and a half confirming that view or is it changing the view in any way? How do you think about that now? Yeah, I mean, so like head, top line productivity is not great. So like to the extent that you're looking for that for your evidence, like that wouldn't be

suggestive on it. But I still wouldn't look there for evidence of this impact. I think top line productivity is probably mostly being held down by like the level of excess churn in the labor market, you know, as an employer, how difficult it is to get people up to speed, to be, you know, at their peak productivity, it takes time. And when you're dealing with lots of still elevated quits and turn over, like, that's going to be a drag on productivity. And that's going to matter more as you, your firm hits capacity, right? Like when you're dealing in the early stage of the pandemic, all your outputs down anyway,

it's not really going to hold your back. But as you start to be returning to regular levels of demand, trying to produce high levels of but you're dealing with churn, that's what's probably bringing headline productivity down. That's my expectation, but that's pretty qualitative assessment. In the experimental evidence, yeah, we've got, like, you've got studies that look at sort of what are the drivers of productivity growth. So, like, Microsoft had this interesting study suggesting that remote workers communicate really well within teams, but, like, they become some siloing between teams,

right? That's an interesting result that is suggestive of possible negative productivity effects. Then you've got straight on experimental evidence. Nick Bloom did a great study on remote work. A lot of the experimental evidence to date has been around like sort of call center workers and like relatively low-skilled. This was software developers and other skilled workers at a company. And they did an experimental study and showing the productivity effects are positive. So, like, that's sort of the accumulative evidence we've got so far.

And I don't see any reason to revise my beliefs there. I do think a big part of the pro-productivity part is going to come through more dynamism in the economy, new firms. And it's really hard to take a company, as I'm sure you guys have felt and change your operating procedures to accomplish. accommodate fully remote work. It's just a different way of doing business. And I think that a lot of companies who struggled to do it are bringing people back to the office and what they will find is that because they said, look, remote work doesn't work in our industry. And that's their conclusion. And what they're actually finding is remote work doesn't work with our leadership team, with our processes, with our way we work. But some startup is going to figure

out how to make it work and they'll be disruptive. Yeah, I can't see new companies forming and optimizing around cubes in an office building. I just can't say it if they can help it. And we have seen a surge in business formation. And it's come down a little, the increases have come down a bit this year. But in the last couple of years, we've seen really an unprecedented surge in formation. And we know this by looking at taxpayer identification numbers for new companies that are forming. So it's pretty good data.

And I'm sure there's many reasons for that. But one thought I had was that this was also remote work empowered. I mean, it's much easier to set up shop if you're able to, you know, you don't need an office space to do it. Is there some evidence of that? Any evidence of that? Yeah, I did a study last year showing that the business applications data in a state panel was related to, you know, growth in remote workers using Upwork data. So, you know, I've seen a pretty strong correlation between, you know, it's not called them, but they're happening in the same places, basically. Yeah.

Hey, Nick, anything you want to add here on the kind of the macro consequences, particularly from the perspective of productivity gains, I mean, anything you're observing that kind of reinforces the point or takes away from the point? No, I think I would just like really strongly agree with what Adam said about just, you know, people saying that or sort of business saying that remote work doesn't want. work for them. I think that's just like a doesn't work for them now and they might find that they're like going to have to adjust that like return to office is something that happened, you know, on this timeline, but on a longer timeline, it's going to be relatively difficult for, you know, firms, you know, maybe in some sectors, so we hold some holdouts, but like to firmly say like, no, five days a week in office. Maybe there'll be holdouts and there'll be small like some firms that survive that way, but it does feel like, you know, as this becomes more and more, you know,

just a normal way of working, it doesn't seem sustainable for companies to hold out against hybrid. I do wonder, you know, again, with the growth or permanence of it, like how much can be done or will be, how much fully remote work will be tolerated or sort of like given to workers, like that margin I'm curious about and don't have like super strong like forecast or beliefs in maybe a little bit more thinking that like hybrid remote work would be like the very durable kind and the the fully remote might be more flexible but I'm not I don't have super strong certain like stance on that. I have one other question and this is on the speculocy. And everything we do is on the speculate. We're speculating all the time. But this is a higher

order of speculation. And it goes to this distinction between hybrid work and fully remote. I have a hard time figuring out how to make hybrid really work. I suppose unless you're saying you got to be in, everybody's got to be in these two days a week. Otherwise, it doesn't get critical mass within the in-person where you're supposed to be. And it doesn't, meetings don't make sense. In-person meetings don't make sense because some people are out. Some people are in. And everyone just lands on Zoom and goes back to the Zoom meeting because that's the easiest thing to do.

Is that, do I, does that resonate with you? I mean, you got to, remote seems like, there's nothing in between here. You've got to have either, you know, hard hybrid, well-defined hybrid. or remote or is there other ways of thinking about it? So my personal experience like definitely lines up with that. Like if you have, especially within teams like they need to be distributed teams and everyone showing up to the Zoom call in separate like places or rooms or there's got to be

some coordination of people being in the office. Like if you've ever been, I've been in meetings where it's like there's like six or seven people in one conference room and then there's like three people in different locations and maybe this is sort of thing with like technology gets better, but it just, it turns into a situation where it's like the people who are hybrid workers who are in the office, it's just like a different environment than if everyone was just like one square in resume. Yeah, makes sense.

Adam, let's discuss the impact of this remote work on real estate markets. And could you summarize the paper you did? I mean, it's very relevant to remote work, to, uh, to, uh, current rank growth, house price growth, and ultimately to the inflation picture, because cost of housing services depends critically on rents, and that goes as a big component of inflation, particularly the CPI, it's one-third of the CPI. Can you summarize the study and the results? Yeah, so we, you know, obviously in the short run, housing markets are looking extraordinarily tight. Price growth is really high. And at the same time, you know, remote work has increased

substantially and I think natural question is like how much has remote work contributed to the decline of housing affordability and in this paper with co-authors Greg Howard and Jack Lieberchon we urge people to take a look at the long run and do our best to think about how the long run might be different so in you've got two components of housing demand that have changed you have overall housing demand which is to say any given remote worker is going to want more housing right on average they need the office space they need the square footage they want you know they want to consume more housing it's it's harder to share a place with like four roommates of all four you working remotely it's like you have this positive housing demand effect the other effect is the

location demand which is it changes where people want to live and in the short run we've had you know constrained supply so how do we put all these things together and think about what the long run will be and the two pieces of information that really underlie our estimates are cross-sectionally, you've seen rent growth be highest and population growth be highest. So the two signs of increasing migration, you've seen that in places where housing is actually more elastic. So the places where the housing supply normally grows more in the long run, that's where people are going. That's where housing demand is strong. And that should reduce house prices in the long run. So it,

Actually, the motivation for this paper was a previous paper that Jack and Greg wrote, which was about how migration over the last two decades into inelastic supply cities was a major driver of inflation because it drives up the cost of living and people are sort of moving into places where they don't build. So it's weird to think about this as a macro phenomenon, right? Like normally we think like people, movement within the U.S. shouldn't be a macro phenomenon, right, to a first approximation. But like, if people are moving into the inelastic areas, away from the elastic areas, that's going to reduce affordability and

increase inflation. And I think now we're sort of seeing the opposite play out. So it's positive for the long run that where we've seen strong demand as places where people tend to build. That should make rent growth come down. That's our expectation. Rents will fall in the future. and it's a positive thing for affordability. And what about the short run? Because I think there might be a distinction here between the long run and the short run. In the short run, you know,

you listen to the folks in the real estate industry. Like, for example, we had Marco Brinsky on the podcast. He's the chief economist of the National Multifamily Housing Council, and MHC. I believe I have that right. And he was, and also John Burns of, a really good real estate guy who owns his own firm that tracks new housing markets very carefully. And they're making the point that the flows of people from the northeast, Chicago,

the West Coast, you know, high rent areas, high house price areas into the south, you know, like Tampa over to Austin, Mountain West, has really juiced up house prices and rents in the areas in which these folks are moving to because they're used to seeing high house prices in New York or in L.A. They come into Boise or Tampa and they say, oh, this is a bargain and they drive up the price. And it doesn't have much of impact on the price or rent for where these folks are coming from because these are big markets and they lose 10,000 people, 100,000 people. It's not going to make, it doesn't change the dial on measured rent growth and house price growth.

And so the net of all of that is when we saw the surge in outflows, you know, back up until a year ago for remote work, that significantly contributed to the house price growth and the rent growth, we observed then. And moreover, in the last year, we've seen remote work. It's still elevated. People moving due to remote work, it's still elevated, but it's definitely down from where it was a year ago. That's helping to contribute to this kind of softening that we're starting to observe in house prices and rents in some of these markets. Does that square with your results? Does that is that contrary to your results or are we thinking about this? Are these folks thinking about it wrong? I think they are. I think they are thinking about it wrong because I think

you need to look at the two channels, the housing demand channel and the location demand channel. If you look at the places that have lost the most workers as a result of remote work and migration patterns, it's not trivial about, I mean like San Francisco, New York City, like a lot of downtown high urban, large urban area lost significant population as a result of remote worker migration channels. And even there, we saw strong rent and house price growth. So what does that tell you? Right. Like it can't just be about places receiving remote workers or seeing demand go up. And that's the whole story. It's really about this increase in demand all over the way. You have household formation everywhere. So even places that are losing population,

household information is going up strong enough to cause tight housing markets there. And so I think that's really a big part of the short-term story is that strong household information growth. And then in the long run, like New York is a place that doesn't build a lot of housing. So in San Francisco, they have a pretty vertical supply curve. And so population loss, once you come from that household formation, population loss should bring house prices, like relatively speaking. Like, if we look at the relative difference in house prices, those should be relatively lower.

These other places should go up, but these are the places that build. So I just think overall, if you take the U.S. population and you move it around and you move it away from the inelastic places and you move it to the elastic places, that's going to be positive for affordability in the long run. Chris, what do you think of this? Did I characterize those, the John Burns and Marco Bernski's views correctly? And how do you think about this in the context of Adam's work? Yeah. Well, I think you characterized it correctly, right? And we are seeing or have seen pretty significant price declines in a San Francisco, for example, as people are moving around.

I think there's an underlying demographic trend here as well that gets commingled with the have remote work and migration that we experienced during the pandemic. So I want to be a little careful there in terms of understanding where the longer term trends are. Because by my mind, we're going to yeah, there's this wave of demand that exists, but that's going to fade over time. And then we'll see where the pieces land. And just backing up to the previous conversation, I think we want to be a little bit careful when it comes to remote work as well. I think we're really focusing on services and financial services in particular. But clearly, right, we're shifting to more reshoring of manufacturing. I think that that fraction of the population that actually can work remotely is

going to remain relatively low, at least to my mind. And that will have some implications on these real estate markets as well in terms of where these businesses are going to be formed, where these manufacturing plants for batteries and whatnot are actually going to be formed. So I think that may actually have a more significant driver in terms of future real estate demand than what we're talking about here in terms of remote work, which may have been more of a one-time shift coming out of the pandemic. I don't know if this is a sustained trend that we're going to see here. I throw a lot out there in a short period of time, so feel free to react.

The point of clarification, though, Chris, when you say San Francisco prices have come down, you mean relative to their peak. You don't mean relative to pre-pandemic. They're still quite elevated compared to pre-pandemic. Correct, but they are, that's right, but they are falling quite rapidly now, and they didn't fall nearly as much as other areas during the pandemic or rise, sorry, they didn't rise as nearly as much as other areas. They lost out. So, yeah, so I think you see that relative, that relative change in prices compared to other parts of the country, that's the fingerprint of remote work there, that has San Francisco has become a less desirable place to live. But then you look at how all places have sort of risen in terms of house prices and housing,

demand. That's the housing demand channel, which is affected by remote work, but also obviously strong income growth over that time period. And I think that that's kind of what we're seeing is like household formation pulling back as interest rates go up and, you know, like housing markets are being pulled back. But yeah, I'm sorry, go ahead. The relative difference I expect to be, expect to be permanent, but this difference between Manhattan, for example, and the surrounding areas, you've seen massive decline in the urban a CBD weight, the price gradient.

You've seen it everywhere. And I expect that to be relatively permanent. And to close a loop on what it means for inflation, you actually, in the study, I think you came up with 1.8% percent. The CPI index will be ultimately 1.8 percentage points lower than otherwise would have been without the remote work dynamic. Is that right? Something along those.

1.8% from here. So it's actually, and even a, higher number would be to run the counterfactual of increased continued urbanization, which would have continued pushing CPI up. So compared to, we sort of just looked at the change from here versus that. But yeah, 1.8, that's a long run estimate, but I think that, you know, that's a lot. You think about urban area, the CPI is an urban, you know, it's an urban inflation index, right? We say, we say long run, say 10 years, take 1.8 divide by 10.

That's 18 basis points, 0.18 percentage points per year. That's, that's consequential. a lot. It's hard to say what the long run is going. Yeah. How fast we get to the lower run for sure. I pick. I think. Yeah.

Yeah. Yeah. But still, I mean, it's meaningful. It's measurable. It's on the Fed's radar screen, you know, should be on the Fed's radar screen. Right. So interesting. Fascinating.

Well, you know, our podcasts are getting longer and longer and longer. And I had hoped to keep this one shorter. But how can I do that? These guys are great. I mean, the conversation is really good. And particularly because they agreed with me, you know, so how can we cut this one short? No possible way. But what it does mean is we got to have you guys back in short order here.

So, and as I said, I think the moment of truth on this whole debate around the labor market is coming, you know, here pretty soon. So maybe we can have you back for that. But I want to thank everyone for participating. And I was going to throw out an open-ended question, but it's always a very dangerous thing. So I'm not going to do that. I'm going to call it quits. Thanks, everyone. It was a great podcast. Have a great Thanksgiving. And we'll talk to you soon.