Moody's Talks - Inside Economics - Slowcession and Sticking to Script

Episode Date: January 6, 2023

It's job's Friday and Mark argues the labor market is cooling off according to script. Colleagues Dante DeAntonio and Marisa DiNatale provide the details. And Cris fine-tunes his definition of the best way to describe the economy's performance in the year ahead - "Slowcession".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 Zandi, the chief economist of Moody's Analytics, and I'm joined by my two trusty co-hosts, Mercia D. Natale and Chris D. Rees. Hi, guys. Hi, Mark. Good to see you guys. And we also have Dante D. Antonio, of course, a standard bearer on this jobs Friday. Hi, Dante. Morning, Mark. I hear you're not feeling so well this morning, but thanks for, you know, toughing it out with us on Inside Economics. Sure. that wasn't very it's like hey guys I did not

I did not require Dante to be on this you ask can you receive Mark I'm here okay there you go okay well and I do feel bad

the colds are no fun anytime a year but I'm glad you're with us I thought before we kind of dig into the media of the matter which is obviously the employment report for the month of December December 2022, which not that I want to color anyone's perspectives.

I thought that was a pretty good report all around. The only, I'm laughing because, well, Chris, you want to describe or. Oh, you know, it's not great for radio, I guess. It's not great for radio, but it's great for video. Yeah. I just put up a sign that I had handwritten five minutes. Oh, and it's backwards, too. going exactly according to the script, which I suspect was going to be your interpretation

of the report. That's right. That's so funny. You're making your own meme. Yes, yes. But before we dive into that, and I do think it was kind of right to script, just saying, we've had this week of slow session. So maybe, Chris, because you coined this term, you want to describe slow session and what it means to the outlook or our outlook?

Sure. So we actually came up on one of the Inside Economics podcast, I think the one right before Christmas, if I'm not mistaken. We've been struggling for a while to come up with a word to describe our baseline forecast for 2023, which definitely has slowing, right? No doubt about it. We're all agreed that 20203 is going to be a rough year in terms of output. Labor market is going to slow as well. So is it a growth recession? Well, that sounds maybe a little too strong.

Do expect it to be somewhat painful, certainly. But true recession, and this is, I guess, where we debate a bit, doesn't sound right either because we're not even I am not calling for three, four million job losses. which would be typical. So is it a mild recession? So we came up with this slow session term to define what we think is going to happen 23. So somewhere between a true recession or typical recession and expansion. Yeah.

Put it together to come up with slow session. I thought it was a great description. And it feels like it's caught on, right? I mean, it's out there in the kind of sort of in a very, small economics world felt like it went viral, you know, not in a rock star kind of viral way, but maybe in an economic community kind of way. It felt like it went viral. So, well, it helps that you titled your economic outlook piece for. Yeah, exactly. And we have a slocession.com website that, uh, and I thought that was pretty creative. You did that over the holidays.

So did you have to pay money to do that? How much does that cost to establish a URL these days? I think it's $10. But it's $10 a year, right? Yeah, well, yeah. Let's see if we need it in 24. I don't know. Exactly.

Maybe then Moody's will pick up the tab. I don't know. Let's see. Yeah. Well, that's very good. Okay. So we're going to do a few things in this podcast. One, go down deep into the bowels of the jobs numbers and try to clean what that

means for the outlook and for monetary policy and for markets and everything else. We're going to do the game, the statistics game, and we have this new feature of the podcast that we've been talking about and that and tried it out a little bit at the end of last year is answer listeners questions. And we'll try to do all those things in the next hour or so. Okay. So with that, Dante, take it away. Give us the rundown on the report for the jobs report for the.

month of December 2022. Sure. I'll steal your line. I think it went exactly according to script, right? I mean, a moderation in top line job gains, right? Job growth came in at 223,000. It's down from a revised 256 in November. The three-month moving average is now just under 250,000 jobs a month. That's down pretty substantially from the prior three-month average, which was north of 350,000 jobs a month. So we're seeing the labor market moderates, you know, maybe not as quickly as some people would have hoped or expected, but it is definitely moderating. Growth still came in above consensus expectations, which was for 200,000 jobs to be added. But, you know, consensus seems to consistently be wanting the job growth to slow more quickly than it has been. So I don't think

it was unexpected to see that moderation be a little bit slower than expected. Unemployment rate edged lower, right, from 3.6 percent. to 3.5%, which is probably not what the Fed wants to see, but at least it moved lower for the right reasons. We got to turn around in... Can you just explain that? Yeah. Yeah, so the employee rate moved lower in large part because labor force participation picked

up for the first time in a couple of months. And employment, as measured by the household survey, jumped by quite a bit over 700,000 in December. So, you know, strong reading from the household survey after it had been showing quite a bit of weakness over the last three, four, five months. So more alignment among the two surveys, the establishment survey and the household survey that we've seen in recent months. Industry-wise, I mean, there's not a whole lot of weakness. And where the weakness is was sort of expected on a major industry basis. The only declines were in information and professional business

services. And both of those are sort of exposed to the string of high-profile tech layoffs that we saw back in mid-November, which would affect this report. Temp help services also continued to decline, which is part of professional business services. That's unexpected. It's typically a bellwether of general weakness in the labor market, a slowing economy. As firms cut temporary help before they cut full-time employees, so not a huge surprise there. Construction and manufacturing, I think, continue to hold up sort of better than we would expect, given the current environment. Wage growth slowing, right, on a month-over-month basis, up about three-tenths of a

percent. 0.273, I believe. There you go. Just saying. Only three decimals? Do you have more than that? I thought that would be over the top. But we'll come back to that.

That's an important number. And year-over-year wage growth now is back under 5% after it had jumped above 5% last month briefly. So that again is moving in the right direction, maybe not quite as quickly as the Fed would hope to see, but certainly moving in the right direction. Average weekly hours ticked lower again, which again is a sort of a positive sign. I think that firms are starting to reel in a little bit and it's likely an indication that job growth is going to continue to slow moving forward. Yes, all at all, I think, I don't know that you could design a better picture of the labor market, given everything that's happening and what we want to happen moving

into 2023 in terms of slowing job growth. Any blemishes at all in the report? I mean, we're kind of in this weird world where we want job growth to slow, but we don't want it to obviously collapse. That would mean the economy is going to go into recession. But we need it to slow so that it cools off, get more slack, a bit more slack in the labor market and cause wage growth to start to moderate even further, get back to something more consistent with the Fed's target. In that kind of context, is there any blemish in the report at all?

I don't know so much. I mean, in an ideal world, we'd like to see labor force participation pick up even faster, right, to help take some of that pressure off of the unemployment rate. We'd ideally like to see the unemployment rate edge a little bit higher, not a little bit lower. But again, the labor force did expand. And so we were moving in the right direction, and maybe just not quite as quickly as we would like. Yeah, just because there are so many things to unpack here, but just while we're on the subject, on the labor force participation rate,

it feels like that's the new norm, you know, that it's down about a percentage point from where it was pre-pandemic. We're now three years after the start of the pandemic. And even without the pandemic, that participation rate would have declined, right? Because of the aging out of the boomer generation from the workforce, maybe not a full point, but pretty darn close to a full point.

So it almost feels like, and the other thing to point out, its participation rate has been roughly where it is now just over 62 percent for almost a year. I mean, it really been tick up one month, tick down, another month that hasn't gone anywhere. It just feels like this is, as I said, the new norm. There isn't any, we can't expect labor force participation to pick up to any significant degree to provide any juice to labor support. apply liver force growth. Yeah, I agree. I don't so much think about the labor force transparency rate compared to pre-pandemic anymore. I think as much as I just look for the labor

force to continue to grow month over month. I think that's the most important thing right now is not does the participation rate ever get close to what it was before because I don't think it will, but do we continue to add 100, 200, 300,000 people to the labor force, you know, to help take some of that pressure off to help fill some of those open positions. I think that's more important right now. Got it. You know, hey, you don't see the, close right, Chris. Sorry, so you don't see the early retirees coming back in, the ones that left. I don't think we've seen much evidence of that. I think things have maybe stabilized a little bit where you don't see that

exodus happening anymore. Maybe some have come back, but I don't think you're going to see a wholesale shift in terms of a bunch of people who retired early in the last two years start to all of a sudden come back to the labor force. You know, maybe if there is a recession, maybe if things turn south, Maybe that encourages more people to come back after that. You know, if finances take a hit. But I don't think in the current environment, given, you know, equity levels for people that, you know, probably made that decision to retire,

that there's all that much incentive to come back right now. Okay. So there's this theory that as the savings run out, right, all those excess savings run out and as stock prices remain depressed, you will see some. But I guess we're saying that would be on the margin, not expecting a wholesale return. And that's also, we've seen that before in prior recessions, right, that after a recession with the hit to asset values, we get some retirees coming back. So as Dante said, I think, if we go into a recession next year, this year, I mean, yeah, then maybe you'd see some of that, but I don't think that's atypical.

But while we're on the topic of labor, we're going to focus on labor supply, right? the supply of labor. And ultimately, that's the growth in the labor force and the growth in the labor force is equal to the participation rate times the working age population. And we're not getting any support to labor force growth from participation. That's flat as a pancake. And maybe it'll go up a little bit if some of those retirees come back in. But we're talking on the margin here. Maybe there's some lingering COVID effects that abate, you know, parents with child care issues or long COVID, you know, maybe, but I don't know that we can look to a significant increase in participation to help us out on labor supply. But on working age population, that's strong.

You know, if you look at overall labor force growth, and that is labor supply, that's very strong. It's over 200,000 per month, you know, on average. So that's what the key reason why over the past almost year, even though job growth is now close to $20,000 and $50,000 per month, unemployment is stable because we're getting increased working age population growth. And just to pull that onion back one more layer, that's because immigration has picked up to a significant degree. And we're seeing very significant increases in labor force supply from foreign foreign-born workers.

So on the labor supply front, it feels pretty good to me. I mean, anything over 200K per month is pretty darn good. Any disagreements there? Any push back on that? No. No, I'm looking forward to next month because next month is the population controls in the household survey. So every year when BLS releases the January employment release, the CPS gets re-benchmarked

to actual pounds of population from the Census Bureau. Wait, wasn't that this month? No. No, it's next month. This month they redid the seasonal adjustment factors this month. Oh, they did the seasonal adjustment factors this month. Yeah, that's right. But next month, they'll do the population benchmarking.

So we'll get a new count of what population looks like. Well, I want to come back to these measurement issues around revisions to the data because there's been a lot of debate discussion around that. And we are going to get a benchmark revision. and we'll talk about what that means in a minute. But before we go there, let's just finish the kind of the broad discussion around today's job numbers. Marissa, anything else you want to highlight or point out that Dante didn't mention?

I'll just point out that I don't see it as a big slowdown from the prior month. If you look at private sector payroll employment, it actually strengthened a bit relative to last month. And that's because there were declines in state government. So if you take government out of it and the government declines were due to a strike at state universities. So if you just look at the private sector, it actually was a bit stronger. It's just really solid all around, you know, like almost all these service industries that we've been waiting to see some weakness in are holding up very strongly. I'm still, you know, construction holding up and being as strong as it is is interesting.

And the other thing I'll note is hours. If you look at the average work week, the number of hours people are working. That is ticked down month after month for the past several months, which is, again, some sign of maybe a leading indicator on just slowing demand for labor. Okay. Chris, anything you want to add? I also picked up on the construction. That was interesting. That continues to remain quite strong relative to what else is, you know,

what we're seeing elsewhere in terms of construction activity. If you really want to nip it, you have to go down into some of the demographics, perhaps, so less than high school unemployment rates actually ticked up. But that's very volatile. So, you know, you can find some blemishes if you want. But overall, very strong report, right? Hard to really complain about anything.

Well, okay, so this may not surprise you, but I think that was a fantastic report all the way around. I mean, the job market is definitively slowing, throttling back. That's right. It is. Go back a year. Average monthly job growth was well over $500,000 per month, distracting from the vagaries of the monthly data. It is now definitively less than half that. We can debate it, but it's less than half that.

And we're getting downward revisions now in the prior months. And this number probably will get revised lower as well. All the leading indicators of job creation are signaling, slowing job creation going forward. So temp help is down. Hours worked are down. So on the labor demand side, it just definitively feels, like we're moving in the right direction here. Second thing, labor supply feels, as I mentioned earlier, feels pretty good to me.

You know, despite the labor force participation rate just hanging tough, we're getting more labor supply. And the combination of moderating labor demand and strong labor supply means that the slack in the labor market, you know, it's not really easing to a significant degree, but it feels like it's starting to develop. We're starting to get some slack in the labor market. And despite that, despite not having a lot of slack in the labor market, unemployment at 3.5, the employment to population ratio for prime age workers at 80%. That's kind of our threshold for full employment in the labor market. Despite that, you know, just take a look at year-over-year growth in average hourly earnings. It's clear now with all the revisions that occurred with this month's release and the new seasonal adjustment factors, that that is slowing. It's now year-over-year-over-year-four-six. It was four. five, six back at the early part of 2022.

And we're, you know, of course, you know, the threshold there is we need something around three and a half percent to be consistent with the fed's two percent inflation target assuming one and a half percent productivity growth. So two percent inflation plus one and a half percent productivity growth is three and a half. That would be where we'd want to see wage growth to, to, to ensure that we're going to get inflation close to the fed's target. And it feels like we're headed in that direction. even without forming a whole lot of slack in the labor market.

And that goes back to something we've been talking about before. And that is, in my view, that jump in wage growth we saw earlier in the year, that was related to the Russian invasion of Ukraine and the jump in oil commodity prices, food prices, agricultural prices. And we saw this gaping out of inflation expectations. And workers said, hey, to their employer, you've got to pay me more to compensate for my higher cost to getting to work. And we saw that jump in wages.

But now that we're seeing oil prices back in, gas prices coming back down, inflation and expectations for workers coming back in, we're seeing that wage growth moderate. And that, again, is without any significant increase in labor market slack. And we're going to get that, you know, here going forward, just looking at the trend lines. So I don't know. It's almost like if I had a piece of paper and I wanted to write down the numbers that I wanted to see in this month's report, this came pretty close. close, you know, to those numbers. And going back to that .273, take that's the month-to-month percentage change in average hourly earnings.

That's November, December. And don't read too much into that month-to-month changes. I know shouldn't do that, but I'm going to do it anyway because it consistent with my view. Take 0.273, multiply by 12, poor man's way of annulizing. What number do you get? Anybody? Anybody? Three and a half percent.

No, there you go. It's close. It's very close. Hey, by the way, one of my favorite movies of all time, you want to guess what it is based on what I just said? Anybody, anybody? A beautiful mind. No, no, no. I think Chris said it.

It's a Groundhog Day. No, that's a good movie. Brain man. No, Dante knows. Anybody? No. Bueller, anybody? Ferris Bueller's Day off.

You guys never seen that movie? Oh, my gosh. Oh, of course. That is like a classic. What is the connection to that and two, three and a half percent wage growth? Oh, no. I started, there's a scene in the movie where the professor who is. Oh, when he said anybody, anybody.

Anybody. Got it. Got it. Yeah. Yeah. So it reminded me of the movie. So trivia. What was he?

What was the question that the professor was asking him? Oh. It was an economics. Because he was Simon. He was a, he was a, was he, was he, was he, was a, was he, was a, was he's a, uh, was he, uh, was a, uh, an economist, the actor. Exactly. Oh, it was Ben Stein. Ben Stein.

Ben Stein. Ben Stein. So what did he, do guys know? What do he asked? I don't know what he asked. Chris, you know? It was related to, um, tariffs, as I recall. Oh, tariffs, right?

A smooth holly or something? Smooth holly. Yeah. Smooth. Yeah. That was it. Well, if we're wrong, the listeners are going to tell us. Yeah, they are pretty quickly.

Yeah. But I thought that was a pretty good. really. Yeah. All right. So, you know, you heard my spiel. I'm actually, I feel so weird. I actually now get nervous on two days of the month. No other days do I get nervous. First is Jobs Friday. The second is now the CPI report. It's like I'm sitting there, you know, at breakfast, waiting to hit the button, BLS.gov, BLS.gov. And then I get really annoyed if it's not, you know, doesn't come up at exactly 830 a.m. Eastern time, but, uh, but, uh, I felt pretty good with that report. Uh, I thought it was, you know, right down the strike zone. Um, okay, let's, uh, go back a little bit and, um, uh, get into the

nitty gritty here. And for those folks out there that don't want to get too nerded out, maybe you can turn to some music for the next five, 10 minutes or something, but, uh, you know, if you go, go watch, yeah, go watch that clip, you know, I'm sure it's on YouTube somewhere. It's classic. And let's talk about revisions. And Mercer, do you want to give us a rundown on, particularly the benchmark revisions? I don't know. Have you been following this kind of debate discussion around the Philly Fed work around revisions? Have you been following that at all? Yeah. Yeah. Okay. You want to fill us all in on that one? Because I think that's actually quite interesting and important. Sure. I mean, I don't remember the specific numbers, but I mean, I can give you the

the overview, the Philly Fed did an analysis of state level data from the quarterly census of employment and wages, the QCEW. That is not a survey, actually. It's a complete count of people on payrolls that comes from unemployment insurance records. And this is the same data source that every single year, the BLS, when they release, also when they release the January numbers, they will be benchmarking the CES, the establishment survey data to this count to see how far off they were in these month-to-month estimates that are coming from a survey, a sample survey. So the Philly Fed did an analysis a few months ago where they looked at the state counts of employment from the QCW.

and they think that average monthly job growth through, I think it was, was it through July that they did it, was actually quite weak. It was barely changed from earlier in the year. It was something like, I don't know, they said only like, yeah, 10,000 jobs had been added on net compared to the establishment survey, which says there were over a million jobs added over that period.

So they're suggesting that the benchmark revisions in, you know, coming years, there'll be one in, there'll be one next month that will be released. And then there'll be, you know, there's one every January that it's going to show that job growth in 2022 was far, far weaker than what we've been seeing in the payroll survey. Do I have that right, Dante, roughly? Yeah, roughly. I think the one thing to be careful about, right, they were looking at Q2 of 2022 in the Fed

piece. Yeah. And when we get the benchmark revisions to national employment next month, that benchmark only actually goes through Q1, right? So that's unlikely to show a huge revision, right? Q2 and Q3 and Q4 will just reestimate a data next month. They won't actually be benchmarked. When we get the state employment benchmark a little bit later on in March, that will actually be benchmarked through Q2. So that may show us a little bit more of what the Fed was talking about in terms of a big slowdown in Q2 if it's still there. And there may be some disagreement between the national number and the state number at that point in terms of what Q2 looks like. And we have looked at, you can look at the QCW national data and it does look

weaker through the summer. So there's actually, if you look at year over year growth in the QCW, there's actually a decline in employment through the middle of the year. So I mean, that does give some credence to this that there may be big revisions coming when we get the benchmark for, you know, 2022. Just to reiterate, because this is very hard to get your mind around. I know. It's confusing. Yeah, when I first started as a professional economist over 30 years ago, this is the first

thing I focused on. And it took me three years to even, you know, have some semblance of understanding what that's going on here. But broadly, the monthly data we've been getting like today's jobs numbers for December, that's based on a survey of some sample of businesses in the economy. I think, what, 350,000? Like 400,000 businesses. Yeah, roughly.

Yeah, businesses out there. And once a year, the Bureau of Labor Statistics takes that survey-based data and so-called benchmarks it to actual employees. employment counts from, you said QCEW, that's an acronym, Quirley, Census of Employment and Wages, you know, something, I think that's what it is. That's based on unemployment insurance records. So every business on the planet in the United States, I should say, needs to, because they have to pay UI insurance, they have to tell the BLS, you know, exactly, you know, how many people are employed. Because that's the whole universe of establishments and businesses. They don't, they don't, they

It's very difficult to process historically, so they only use that, they only do this once a year. And it's as a March of each year. And so the benchmark revision we're going to get next month in February is based on the QCEW as of March of 2022. And by the way, we know that, as the BLS told us, is going to be a revision up. They're going to revise up employment of 500K, roughly 500K, that March number. So that means we created actually more jobs, you know, in the year through March than previously estimated. And we know that for a fact.

And now this Philly Fed report said, okay, let's take the QCEWs. We'll do the processing ourselves because we get that data. We can process it and make some sense of it. And they're saying as of the Q2, the June data, March to June, based on that analysis, it feels like the job market really slowed very sharply at that point. time. It's slowed in the survey-based data that we're looking at now, but they're arguing that, oh, no, it's slowed even more than that. Obviously, there's, I don't think it's slowed as much as they think that they estimated because of, as you said, they're doing this from adding up states to the

national and there's all kinds of complications, which we won't go into there. The seasonal adjustment factors, a lot of complication there. So I doubt that it is slowed to the, the degree that the Philly Fed analysis would suggest, but it is very suggestive that the job market is actually slowing to a greater degree. But we have the two, one of the two of the best people in the country in Marissa and Dante to talk about this because they were at the BLS and this was kind of the work that they were doing when they were there. Did I get that right? I know you just reiterated because it's so tough to get your mind around it. Does that sound about right? That's right. Yeah. Yeah. Okay.

And it does, you know, I had thought that this made sense that we'd see some downward revision in the establishment data. And that would make it more consistent with the data we're getting from the survey of households. That's the other survey. But in this month's report, we saw a huge increase in household employment, the employment as measured by the household survey. And now if you look over the past year, the amount of jobs created under both surveys are, roughly the same. They're roughly the same. You know, there really isn't a whole lot of difference there. So they're telling a very similar story. Okay. Let me, before we move on, you know, I had a bit of a soliloquy there in terms of my interpretation of what this means for the economy

and the job market, the December report. Anybody want to push back on that? I mean, it feels like we're all kind of in the same place. Maybe not taking it the next step and saying what it means for probability of recession in 2020, but it feels like we're all pretty much on the same page. Is that right? Any disagreement? Yeah.

I'll just say, I'll just say about wage growth, average hourly earnings, that, you know, it is affected by the composition of job growth over the month. And this month, if you look at the payroll survey, there were a lot of low wage jobs added, right? So there were big gains in some components of health care that are lower wage and another big gain in leisure hospitality. And on the other side of the coin, there was either declines or no growth in things like finance and components of professional business services, which are higher paid. So that could be skewing the average earnings over the month lower than they actually are.

But, you know, when we've talked about this a million times, there's no great, really good. month-on-month tracking of wages. The wages that we get from the employment cost index, the ECI are quarterly. So there's a big lag there. So, you know, in the absence of anything better, this is what we have to look at. But just take that with a grain of salt. Yeah. I want to talk about one other labor market issue before we move on to the game and listener questions. And that is, this now is based on looking at the other big report we got during the week, the job opening labor turnover survey from the Bureau of Labor Six, so-called jolts, that kind of gives you better look into the bowels of the labor market

and what's behind the job growth that we're observing. And one thing that I've noticed is all of the slowing in job growth that we've gotten over the past year. You remember, we're at 600K per month at the start of 2020. We're now down to, say, we're 500K to 600K,000. We're now down to you know, 200 to 250K, something like that, is less hiring. So we've seen the number of hires by businesses decline. And as of November 22, that's the last data point from Jolts that we got this past week. That is back to where it was pre-pandemic. So hires are very consistent with where they were pre-pendemic. What's so different about the current environment and why we haven't got even slower job growth is that layoffs remain very important.

very, very low. Just so, and I'm not going to go too deep into this because maybe I'll take someone's number for the game. But you can see in the unemployment insurance claims. You can see it in the Joltz data. They're very low. Well below pre-pandemic, well below what we've seen historically. And kind of the, it feels a little counterintuitive for people because they hear about all

these tech layoffs, right? You saw Salesforce, a big software company, announced 7,000 in layoffs. this past week. And, of course, every major tech company from, you know, meta to Amazon has announced layoffs. But despite that, overall layoffs around the economy remain very, very low. So which means other sectors of the economy are, you know, they're just not laying off workers. So I, you know, my expectation is that we will see a normalization of layoffs here over the next three, six, nine months that will go from these record low layoffs back to something that's more typical pre-pandemic. And by so doing, job growth is going to go

from 200 to 250K to something closer to 100K, maybe a little bit south of that. And that is precisely where the Fed would want to see that job creation go, because at 100K, that is consistent with long-run labor force growth. You'll see some slack starting to develop in the economy, and that will help bring that wage growth in. Does that sound, you know, roughly right, that kind of narrative? I mean, anything to add to that kind of the observations I just made, Dante? I think that's roughly right. I think there is some question around, you know, the timing of sort of announcement of layoff

and sort of when that might actually show up in some of this data in terms of UI claims or in terms of jolts, you know, given the sort of unknown nature of what severance pay and other things look like. I do think there's some time lag between, you know, hey, we're laying off 7,000 workers and when that, when those people actually appear in those different pieces of data. And particularly with UI claims, you know, for a lot of these people, if they're finding new jobs almost immediately,

they may never be filing for unemployment insurance. So even though the layoffs happened, it doesn't mean that they have to show up in these different pieces of data necessarily. And it doesn't mean that if they're going to show up that they're going to show up in, you know, a couple weeks or even the next month, it may take a little bit longer than that. Yes, I think there's just a timing and sort of scale issue that could be a play a little bit.

Yeah, yeah. I've had this thought, and I need to explore it more deeply, but the kind of the thought I've had is that to have a recession, it feels like you need to have a significant increase in layoff. I mean, can we have a, I mean, hiring declines obviously in recession as well, but can you actually have a recession, you know, the economy, negative job numbers, the economy going backwards without a significant pickup in layoffs. I mean, it feels like that's kind of critical because at the end of the day, layoffs is what would spook people and consumers and have them pull back on their spending. I mean, if it's just simply that businesses aren't hiring, but everybody is holding

on to their job, it doesn't feel like that that's going to be enough to create that kind of panicked environment where people go into the bunker and stop spending. Especially when the unemployment rates 3.5%. If businesses stop hiring, pretty much at this point, everybody who wants a job has a job, right? So I agree. And historically, if you look back at recessions, you always see layoffs and you see outright declines in payroll employment. So I can't see calling it a recession.

if we're not getting massive layoffs. It's not, you don't have a recession. That's right. You have playoffs, yeah, okay. Chris, you were gonna say something though. Yeah, you know, this time is different though, right? Yeah, yeah, yeah, so much so. Throwing all your, what are you saying?

Your sayings back at you. They have so much demand out there. There's their structural issues here that I agree. If you had no layoffs, if you had no declines at all, then certainly can't come. call it a recession, but if it's a million, right? So very modest compared to previous recital, or if it's half a million layoffs, right? Is that still a recession? And consistent with slowing in other metrics, spending down, investment down, GDP contracting. Well, hold

it. Is that still the numbers, though? Okay. I am going to give you the numbers. Hopefully I don't take the, and just I'm, that's interesting what you're saying. I just want to understand. the numbers. So if I look at Joltz, in the month of November, there were 1.35 million layoffs. I don't think I'm making that number up. I think that's the right number. On average, from the start of the series from Jolts, which is back in early the 2000s through up until the pandemic, the average monthly layoffs, and this would be therefore typical, you know, on average in a typical economy was $1.9 million. maybe 1.95 million.

So, you know, I would think, you know, we need to see, actually, to avoid even further rate hikes and ultimately recession, we have to go from 1.35 to 1.9. You know, that's an increase of 500K, 550, 600K. That feels like we need to see that. But for us to go into recession, it feels like we've got to get into the, you know, two millions, two and a half million per month, you know, something like that. And it feels like a far, far distance from where we are today. Those are the kind of the number. So it's not 500K, Chris. It's got to be a big increase in, you know, in,

in layoffs. Yeah, I was talking about employment, right? Oh, employment. Oh, okay. Sorry. Yeah. Typical is three, four million job losses, right? Yeah. Right. But what if it's much smaller than that, right? Where is that fine line between, uh, recession and no recession. Right. Right. Because of the structural changes in the economy that we, there's so much demand for labor out there.

Firms want to hang on to their workers, right? They'll sweat it through, right, rather than lay off. Right. I guess that's my point. I mean,

it feels like businesses are going to be reluctant to lay off because they know that their number one problem is finding, you know, on the other side of this this weakening in the economy, they know their number one problem for the foreseeable future is going to be finding workers and retaining workers. So they're going to be really reluctant to lay off. But therefore, the adjustment they're going to make to a weakening in demand and just a softer economy and their concerns about the economy. I mean, almost every CEO out there thinks recessions headed in our direction is through

less hiring. Right. So if you have a lot of, have less hiring, you get a weakening in job growth. It doesn't feel like you actually can go into recession unless you have an increase in layoff, which would ignite that pullback in spending that is necessary for an actual contraction in economic activity. See what I'm saying? It just feels like a different dynamic at play here. This time is different, you know, in that sense. Yeah. Yeah, I mean, but that that lack of hiring does pile up over time, right? So. Maybe that's enough to push us in, that by itself. It sounds like a slow session.

Slow session. It does sound like a slow session to me. Yeah, very good. Okay, I just wanted to try that out on you. I just, I need to dig deeper. We need to dig deeper into that kind of question, but something interesting that's going on that's very different than, you know, previous recessions, I think.

Okay, let's play the game. Statistics game, we each put out. a statistic, put forward to statistics. The rest of the group tries to figure that out, do cues and deductive reasoning and clues. And the best statistic is one that's not so easy. We get it quickly, one that's not so hard, we never get it. And something that bonus, if it's apropos to the topic at hand, which is the job market, but doesn't need to be. Okay, who wants to go first? Who's going to raise her hand? I'm, Dante, should I get you out of the way? Because I know you're, you're kind of struggling there a little bit. I'll go first.

I'm on my third number because of all the details. Oh, sorry. Oh, it's okay. Oh, no. Good thing I had a third one. 147,000 is the number. From the jobs report. It is from the jobs report.

From the payroll survey. It is not from the payroll survey. From the household survey. And it is. To be more specific, it's a decline of 147. Oh, well, that would, that's a little helpful. Oh, it sounds like you missed a negative sign. Yeah.

It was intentional, you know, don't want to give away too much right away. A decline of 147,000. Could it be the number of people who are out of the workforce that say they want a job? That declined. It is not. Okay. Is it something like that in that genre? Yeah, it's close in terms of words.

Oh, it's close. Okay. I'll give you close, sure. Oh, marginal, discouraged workers. Yeah, it has something to do with labor. One of those. Yeah, one of those. For time for economic reasons.

Wandering around the right part of the report, I think. I know. And how you look at it. Because we do know that unemployment and, underemployment declined in the month, right? So it's got to be one of those statistics that describe that. Is that right? That is correct. Okay. And it's not okay. What do you think, Marissa? You know the bowels of this report better than anybody. I know. I'm going to go into it and start looking at it. I don't know. It's so it's not marginally attached. It's not

discouraged. Part time for economic reasons. I said that. He said that. He said that. He said no. He said no. Okay. Can you give us a hint? Sounds like no. Put us out of our misery. What is it?

All right. What is it? It's the decline in long-term unemployment. So people that have been unemployed for 27 weeks or more. And it backed down to essentially a cycle low, basically the lowest it's been in quite some time. Oh, interesting. And I think that had been at least a concern of mine, I don't know, recently a year ago, maybe that you'd have these people out of the labor. force out of the labor market for too long and to be hard for them to get back in,

given the pandemic and everything else that had happened. And that doesn't seem to be a case, right? I mean, there are very few people that are long-term unemployed at this point, at least relative to, you know, historical levels. And so that's, I think, a positive sign. Yeah, it's in the report they provide data on the number of people unemployed by length of unemployment. Have you noticed anything else in that data, like near, has near-term unemployment?

employment started to rise, maybe the tech layoffs are showing there, or is that still also very low? I suspect it is still very low. I think it is still very low. I'd have to go back. Okay. It is. No worries. It's still very low.

Okay. Okay. Okay. That was a good one. Good statistic. We kind of fell out, fell down on the job, but, you know, that was a pretty good one. Hey, Mercy, you want to go next? Sure.

Minus 35,000. Oh, okay. You sure it's a negative. Yep. Is that temp help? Yeah. Yeah. I know.

We talked about it. Whoa. I wrote it in the release this morning, so that helped. Yeah. And he talked about it up front. There's the cowbell. Yeah. That's a good one.

Way to go. And this is the, I picked it because it's fallen for five consecutive months. And it's down about, down over 100,000 from its peak five months ago. And temp health is something we often look at is perhaps a leading indicator of where the rest of the job market is going. So employers will, you know, when they're ramping up after a recession, they'll hire temporary workers at first when they're still kind of unsure of where things are headed. And temp workers are often the first to get laid off or let go before employers start to let go permanent employees and they can easily adjust their demand. for labor. And it just goes to what we were just talking about, about, you know, hiring may pull back. We haven't seen layoffs rise yet. They're incredibly low. But this is, you know, perhaps another indicator of just

a weakening in demand for labor that is not yet showing up in layoffs. Is there any chances labor supply? These temp help companies just can't find workers? Sure. That could that could certainly be. Okay. Well, which is it? You argued it was demand. I think it's, I think it's, I think demand just because we've seen, we saw temp help, you know, rising, kind of rising and falling with the economic cycle. So we saw it fall off obviously during the pandemic, started coming back again when the economy reopened and rebounded. And then when things started to weaken early in, you know, late 21, 22 with higher inflation, Russia's invasion of Ukraine kind of weakened again. So it's very, it's very cyclical. I think it's, I think it's indicative of demand. And I'll say other

surveys that we've seen of business intentions to hire over the next year, you know, they're all kind of showing the businesses are saying we're going to pull back on hiring. Okay. So, so it could be supply, but you don't think it is. I don't think it is. I think it's demand. Demand. And signals that, it's a good leading indicator signaling slower job creation going forward. So if companies aren't getting temp help, that's the first thing they cut before they actually stop cutting their own workforce or stop hiring their own workforce. Yeah. And, you know, like a lot of people think of temp help always is sort of white collar jobs,

but there's a lot of temp help that's used in manufacturing too. And we've seen that. Great point. Yeah, that's a great point. Yeah, that's where manufacturers are still adding to payrolls, but the first thing, it feels like they might be cutting their temp health. help. Then the next thing that would happen is that they start to cut their own payrolls. Right. Yeah. Okay. Good. Hey, Chris, what's your statistic? Okay. I'm going to reframe the discussion here.

Ooh, 49.6. Is, you know, the ISM non-man survey just came out this morning. That's the one. Oh, it's the non-man. See how I do that? I didn't even have a chance to look at it because that came out after we started this report, but I could sense he was going in that direction. So that's, you're saying your reframe was really important when you said that. That was a hint. It was a little on-air. It was my cowbell. Man,

gave it to you. Oh, did you? Okay, I didn't hear it. Okay. There you go. Extra. During the ring didn't come through. Oh, so, okay, so tell us about that report because that came out while we were, while

we were in the middle of this podcast, so we hadn't had no chance to look at it. So what's it say? That's right. So I, it's bad. It's bad. 49.6 is in contractionary territory. right below 50. It was 56.5 in November.

So big drop in the index. And across components, we can see a decline, declines in business activity, new orders. Right. So if you're thinking of this as a more forward-looking type of index where business is headed, right, certainly suggests a pullback in the services part of the economy as well, right? We've already talked about manufacturing, but services also seem to be softening. So. Yeah.

Although this is, you know, bad news is good news, right? I mean, we're expecting this, right? I mean, this has to happen. Well, to this degree, I mean, this is pretty quick. Oh, yeah. Oh, yeah. Yes. I would think.

Yeah. Especially on the ISM surveys, because those are, you know, half sentiment surveys, you know, what people feel because it's not based on on data. But what about do you see. Yeah. New orders. They're getting some signals, right? Yeah. It's not purely speculation.

Yeah, I'm curious what the markets are, how are the markets reacting to it. My guess is reacting positively to it. Bad news is good news. It's probably the case here. Oh, probably the combo, right? Yeah. Yeah, I'm sure they're pretty happy with that. Hey, can I ask, though, on one of the key statistics in that survey is the supplier deliveries,

because that goes to inflationary pressures? How did that do? Manufacturing, that's way down, suggesting that, that, you know, inflationary pressures are abating pretty quickly in the manufacturing sector. What about services? That's important. That came down as well. Oh, did it?

53.8 to 48.5, right? Oh, that's a, okay, that's encouraging. Okay. All right. Okay. Prices paid down, right? So. Yeah.

Yeah. Okay. Interesting. Yeah, this goes back to what you were saying. You pulled out one of these surveys, similar survey back in the last podcast, the one done by S&P. Yes. Now is weak as well, as I recall.

You criticized mercilessly. I did. I did. Discredited. Yeah, yeah. But this is certainly directionally in the right direction. Consistent with that report. Yeah.

That's right. Oh, interesting. Okay. All right. So I guess, again, you can see what you want to see. So definitely. Yeah, yeah, yeah. Yeah.

The question is the speed of deceleration. The speed of deceleration. That's a good point. Right. But you're not arguing. I mean, if you take this at literally face value, you're saying manufacturing is now below 50, ISM, non-man ISM is below 50, you're not, that would suggest the economy's contracting. You're not suggesting that, are you?

Not yet, no, but it's certainly suggesting that we're moving that. Yeah. The momentum is certainly moving in that direction. Yeah, but now you're again, it's deceleration, are you? Yeah, but that's right, deceleration. And that's consistent with everyone's view of what should happen, right? The economy's got a decelerate. But you're not arguing it's actually contracting.

Not at the moment. Not at the moment. Okay. Right. Yeah. Actually, okay, here's, I got, this leads to my statistic and that's a bit of a clue. You ready? Two numbers.

4.1.1.4. Two numbers. They're related. 4.1%, I should say. Oh. Quince rate and layoffs. No. And I have changed.

It's not employment related. It's not, it's not related to the employment report, the jobs report. Or Jolts. It came out this week. Indeed. They're both percentages or just the first one? They're both percentages. Yeah.

The first one came out. It was updated this week. The second one was updated, I think, last week. 4.1.4%. It percent. Percent. Yeah. Not a percent change.

Just a percent. Percent. Yeah. I'll give you a clue. This is a pretty strong clue. Economic View, our Economic View website. This is something that Dante runs. This is very embarrassing, I will have to say.

It's our estimate of fourth quarter GDP. Yeah. Yeah. Yeah. 4.1 percent fourth quarter GDP. Fourth quarter GDP. Can I repeat that, please? 4.1%.

That doesn't feel like a contraction to me. I don't know. Again, rear-review mirror. All right. Oh, no, this ISM service for December. Yeah. All 40. We're talking about the 4th.

And that's on top of 3.2% in Q3. What was the 1.4? What was the 1.4? Okay, one point for Dante. Come on Dante. That's what it was. Oh. Recently.

That's true, but that's not one of the revisions ago. You'll see the other number on the EV website. Current month GDP. So embarrassing. So embarrassing. I thought you're talking about the previous and the revision. I know, I know, blah, blah.

Monthly for December and the current quarter estimate is. Yeah. November. So Dante, Dante has a great job here. I'm just teasing, obviously. But he puts together a current quarter tracking estimate of GDP. So you take all the monthly data. coming out, ISM surveys, employment reports, all that stuff, through our modeling, come up with an estimate,

try to summarize it in what does it mean for GDP for the quarter. And all these numbers, I suspect when we put the ISM survey in there, it'll bring that down a little bit. We'll see how that does end of the day. But we were at 4.1% GDP growth. And by the way, the Atlanta Fed, the other folks that do a good job here, they're at 4% too, I think, or something close to that. So that's on top of 3.2% growth in Q3.

So it doesn't feel like the economy's losing any momentum whatsoever. I mean, I don't want to overstate the case because it's trade and inventories and, you know, clearly Q1 of this year is going to be a lot weaker than 4.1%. But nonetheless. And the 1.4, that's the monthly GDP estimate. So we estimate GDP monthly, you know, as you know, from the Bureau of Economic Analysis, we get quarterly estimates and we construct our own estimates of monthly GDP. And for the month of November, that month of November, it was 1.4%.

And yet we haven't come out with December yet. We don't have all the data yet, but that feels like that's going to come into strong, too. So I don't know, Chris. I put my money on Dante's statistic other than that ISM survey. I don't know. It feels pretty strong. It fits your story better. Okay.

It makes me feel better. Okay, listener questions. Let's go to listener questions. And before we go there, you know, we have been getting some, you know, just to, I should, level set. We've started this new part of the podcast where we answer questions that are being posed by listeners. And now the onus is back on the listener. So if you've got questions that you'd like us to address, and we'll address a couple, three of them, you know, try to do that every podcast where we don't have an external guest. please let us far away. LinkedIn, Twitter, help economy.

Is that help economy? I always get confused. Help economy at Moody's.com. Go to economy.com website. You can post questions there. You know how to send us an email, you know, that kind of thing. And we've been getting a lot of good comments. And Chris, we got a really kind of heartwarming comment from a listener. You want to describe that? Yeah. Yeah. A longtime listener. It's been a, commenting with me and previously Ryan for a long time. But Matt Forrester informed us that, well, due to our podcast, we motivated him to start a graduate degree this January. So congratulations and good luck to Matt.

And thanks for listening. Yeah, that was, I thought that was great. Yeah. Okay, here's a couple, three questions. I'm just going to throw them out. First one is to you, Chris, because it goes back to slow session. And just to put a finer point on it, the listener asked, what's the difference between slow session and stagflation? You want to take a crack at that one?

Oh, I'd say they're very different. Very different. So stagflation is a really negative economic outcome, right? High inflation and slower, low growth, no growth, or actually slow growth, negative growth, contraction. So that's a very severe situation like we had in the 1970s. Slow session is really just a slowing of the economy, economy that's growing perhaps below, certainly well below potential, maybe even a couple of quarters here or there of small negative growth, but not with that very high explosive type of inflationary environment.

If anything, do expect to see inflation coming down over this period as well. that's how I would characterize it. Yeah. Yeah. They're quite different. They're very different things. Yeah. Stackflation is bad.

Slow session. The worst. The worst. Slow session, not great, but obviously much better than recession, stackflation. So, you know, I declare victory. We should be very happy if we get slow session in, in 2023, going into 2024. Okay, here's another question.

since the recession is likely to say now this this listener is not assuming we are going to have a recession since the recession is likely to be mild is it possible let me just lost it here is it possible have a downturn that is confined to just the housing and tech sectors alone is that is that consistent with a recession mercer you want to answer that question I think it's I think it's difficult to have a severe downturn in, particularly in housing, because it is so, the multiplier on housing is big. And what I mean by that is that there's a lot of jobs tied to the housing market in all different industries. I mean, you have manufacturing, you have financial services, you have construction, right? You have professional services. So I think it would be very

difficult to have a severe contraction in a segment of the economy that's that large and keep it confined to that part of the economy. Okay, one more. Okay, this is an interesting question, and I'll just read it verbatim. The tech valuation bubble has probably already popped. Banks have decent balance sheets. Emerging markets have already hiked a good deal, Hiked interest rates a good deal. What fat still exists to be trimmed? So I guess the broader question here is, you know, generally before recessions, you've got some major imbalances in the economy, something fundamental is wrong.

You know, tech bubble, he mentioned this questioner asked about merging markets, but also real estate markets overbuilt, a high leverage, that kind of thing. So it feels like a lot of those potential imbalances, that could undermine the economy and lead to recession have been already addressed to some degree, right? I mean, stock prices are down 20 percent. Crypto prices have collapsed. As the listener pointed out, emerging markets have kind of adjusted, raised interest rates, stabilize their currencies.

The banking system is in pretty good shape. So what's out there? What imbalance? What fundamental problem is out there that could be at the center of a rate? recession. Chris, do you want to answer that question? Well, I mean, I guess the obvious one is that inflation is still prices are out of whack right there. That's still the biggest factor facing the economy. And the Fed is trying to address those with the rate hikes and monetary policy. And that's certainly a mistake there could certainly be the final straw that leads us into recession.

That would be one argument. I would say for the other asset, I mean, asset prices have adjusted, but they're not. You could argue that some of them have not completely adjusted, like housing, right? You could make the argument that we still are quite overvalued. Now, we've argued for some demographics and other factors that would support housing through a more gradual adjustment process, but you could construct a scenario where house prices have to correct further in a much more violent fashion and that could trigger some recession. I don't put a lot of probability on that, but if you want to look for sources of imbalance, I would argue that the housing house prices

are still out of balance relative to rents or incomes, right? Yeah, makes sense. Yeah, so the imbalance, the imbalance is the thing that's staring us in the face and that's the high inflation. Yeah. That's the obvious one. That's the obvious one. And of course, in past recessions, many of them have been preceded by high inflation and a Fed that's been jacking up interest rates. So, you know, right. Similar to kind of dynamic. The difference probably is that in those other recessions, we did have major imbalances in

the economy that got exposed by the higher rates that exacerbated, you know, conditions and reinforced the problems in the economy. But you don't, doesn't, but that doesn't necessarily argue for no recession. You may have a recession. It's just milder because you just don't have. those imbalances. Yeah. And announce of humility, right?

Typically, we only figure out those imbalances after good point. Right. So there might be something out there that we're not identifying or maybe we're giving too little weight to, maybe there are, you know, company balance sheets, zombie companies out there that we don't know about or, I don't know, derivatives. Who knows? There could be. Yeah.

The unknown unknowns. I think that's the question, right, that's being asked. is what what else could be out there, what shoe could drop. What fat still exists to be trimmed. Yeah. Yeah. Okay. Okay.

Before we call it a podcast, let's just go around the horn like we've been typically doing just to kind of sum it all up. What's the probability we go into recession at some point in 2023? Do you think we should extend that out now to early 24 as well? I mean, 2023, early 22, 24. Let's say over the next year, so that would encompass going into early 2024. Dante, let's start with you. You're kind of the mystery man here, I think.

We haven't asked you that question in a while. I think last month I said 50%. And that's where I have now. So whether I say 50 last month, I'm there now. So yeah, I think it's still 50-50. But you have to take a side. So which side would it be? No recession or recession?

I'm still on the no recession side. No recession side. So you and I are like on the same page. I'm trying to keep my job, right? Yeah, yeah. Well, you can come back anytime. Come back anytime. Okay.

Marissa, where do you stand? I'm still like 55. I think last time you were at 55 percent, right? I'm still at 55. You're still 55. So today's numbers didn't push you in one direction. No, I mean, if anything, today's numbers are more heartening, I think. I mean, lower probability recession.

I mean, yeah, I have no reason to up it right after today. Right. Okay, very good. So we get the CPI number, I think, is that next week or? Yeah, next week. Yeah, okay. So, hey, Chris, it feels like she might be wavering here. If I would get a good CPI number, she might come in a little bit.

We'll see. We'll see. These are the two reports. Yeah. Okay, Chris, I think you were at 70%. 70? You know, two numbers here. That ISM is making me thick.

But I'll go with 68. Oh, that's a movement. Mr. Brightside. Yeah, that's a movement. By the way, this is kind of a little mind-numbing, but you in your baseline would have a recession. For you to switch that back to no recession, would the probability of that have to be no recession,

and two-thirds, so one-third probability of recession going forward? You see what I'm saying? Yeah. Okay, so we're a long way from you changing your baseline forecast from recession to no recession. Well, but there's gradation. And now that we have slow session, you know, I have another degree of freedom there. Another degree of freedom. That makes a lot of sense.

Okay. All right. And as I said, I'm still at 50-50. I do have, you know, I have to choose a side and I still side with no recession. at this point. I feel, actually, the last two, three months have been feeling better and better about that. So I can't wait to see that. So still 50-50. No, you're not going to 45. Yeah. I think it's, you know, I think that's still reasonable to be 50-50. But, you know, if I had to pick a side, pick the no recession side. But yeah, not quite comfortable enough to say, you know, less than

50-50 at this point. Here's the other thing, which is going to complicate our discussion. going forward is we are now going to start creeping into 2024. So, you know, it is, that adds a level of complexity to this conversation around probabilities of recession as we move into 2024 because, you know, that's just, you know, looking out a little bit further, you know, things, things do happen. Okay. So what's your two-year probability? I don't, you know, that's the question. Okay. Let's do that next time. I'm not sure. It's got to be higher than 50-50, though, doesn't it? Almost by definition,

doesn't it? Sort of. It's cumulative, right? Yeah. Yeah, let's think about that and talk about that in future podcasts. Okay. Anything else, guys, before we call it today, Dante, looks like you want to say something?

I was just looking at the market expectations for what the Fed's going to do. Oh, yeah. It shifted quite a bit on the report today. I think yesterday it was 6040 in favor of a 25 basis point hike in early February, and it shifted to 75-25 in favor of a 25-bases point hike. So the market seems to think that the Fed likes this and will, you know, more likely to downshift to 25 basis points. Can you tell what they brought in the terminal rate because it was over five? Is it now below five by any chance?

Can you tell? It didn't look yet. I'm just very curious. I mean, if it goes below five, they, you know, prior to this report, they had three, three-quarter points. rate hikes kind of built in putting the funds rate just over 5%. Yeah, it's still pretty splits. Right now it is slightly in favor of the terminal rate at 475 to 500. Oh, okay.

It's split between that and 500 to 525. So it's not a clear. So five on the nose, it feels like. Yeah, basically. Okay, good. Thanks for that. Okay. Well, with that, we're going to call this a podcast.

Thank you, listener. Talk to you next week.