HOW BADLY YOU WANT TO DECLARE VICTORY AT THIS POINT? JARED: NOT BADLY AT ALL. TRENDS ARE MOVING IN THE RIGHT DIRECTION AND SOME VERY IMPORTANT VARIABLES.
. WE ARE LOOKING AT THIS FROM THE PERSPECTIVE OF HOUSEHOLDS AT THE KITCHEN TABLE. WE KNOW THE PROGRESS IS IMPORTANT.
WE KNOW WE HAVE MORE WORK TO DO. IN THIS REGARD, ONE OF THE UNDERAPPRECIATED NUMBERS COMING OUT OF THE PC REPORT TODAY IS STRONG CONSUMER SPENDING IN JULY. .
4% FOR THE MONTH REAL INFLATION-ADJUSTED. JUST BELOW 3% YEAR-OVER-YEAR. THAT TELLS YOU THE LOWER GAS PRICES WHICH ARE $.
50 PER GALLON , LOWER THAN THEY WERE A YEAR AGO. STRONG JOB MARKET GENERATING REAL WAGE GAINS. THOSE ARE CREATING FORWARD MOMENTUM IN THE JOB MARKET.
WE ARE SEEING THAT IN CONSUMER SPENDING, EASING INFLATION, RISING REAL PAY. KAILEY: I'M GLAD YOU RAISE GAS PRICES BECAUSE ON THE EARLY ADDITION TODAY I SPOKE WITH PATRICK ON WHO IS GAS BUDDIES HEAD OF PETROLEUM ANALYST AND ASKED HIM ABOUT THE TREND OF GAS PRICES AND WHERE HE THINKS THEY COULD GO. THIS IS WHAT HE TOLD ME.
>> WE COULD SEE MORE AND MORE GAS PRICES BELOW THE THREE DOLLAR A GALLON MARK. -- BUT HE DATA SHOWING EIGHT STATES WHERE AVERAGE GAS PRICES ARE BELOW THREE DOLLARS A GALLON FOR LABOR DAY. THAT NUMBER COULD DOUBLE OR TRIPLE BY THE TIME GETS A HALLOWEEN OR THANKSGIVING.
SOME CAVEATS, TYPICAL CAVEATS APPLY. HURRICANE SEASON HAS BEEN RELATIVELY QUIET. WE ARE IN THE.
PRIME COUPLE AREAS OF INTEREST THE HURRICANE CENTER IS MONITORING. THE OTHER WILDCARD, THE MIDDLE EAST. KAILEY: HOW WORRIED ARE YOU ABOUT THOSE CAVEATS OR DO YOU THINK WE COULD BE LOOKING AT A SUB THREE FIGURE ON THE AVERAGE HOME PRICE COME ELECTION DAY?
JARED: PATRICK KNOWS THOSE NUMBERS BETTER THAN ALMOST ANYONE AND HE HAS BEEN QUITE A RELIABLE FORECASTER WITH THE CAVEATS, THE ONES HE OFFERED THAT IT IS HARD TO TELL OF THE WIGGLES AND WACKOS. WHAT I CAN TELL YOU FOR SURE IS DRIVERS THIS LABOR DAY ARE GOING TO BE LOOKING AT THE LOWEST PRICE AT THE PUMP IN THREE YEARS. IF YOU LOOK AT TSA NUMBERS SO WE ARE NOT JUST TALKING ABOUT DRIVING.
WE ARE TALKING ABOUT FLYING. WHAT WE SEE IS A LOT OF PEOPLE GOING A LOT OF PLACES. I UNDERSTAND THERE ARE STILL REAL ANXIETIES OUT THERE AROUND THE LEVEL OF THE PRICE.
CERTAINLY VP HARRIS, PRESIDENT BIDEN REFERENCE THAT EVERY TIME THEY TALK ABOUT IT TO COLLUDE IN REFERENCE TO THEIR COST-CUTTING AGENDA. HOUSING, CHILDCARE, PRESCRIPTION DRUGS, JUNK FEES. THAT AGENDA REMAINS AS AGGRESSIVE AS EVER.
IT IS IMPORTANT TO SEE IN TODAY'S REPORT RISING REAL INCOMES. WE DID A BLOG ON THIS TODAY. WE HAVE REAL INCOMES UP 5% SINCE THE PRESIDENT TOOK OFFICE.
THIS IS IMPORTANT. ONE OF THE THINGS WE HEAR A LOT IS PEOPLE TALK ABOUT THE PRICE SIDE OF THE EQUATION WITHOUT LOOKING AT THE FACT WAGES AND INCOMES HAVE BEEN BEATING PRICES. THAT GAS STORY IS PART OF THE FAVORABLE STORY FROM THE CONSUMER'S PERSPECTIVE.
KAILEY: AS YOU RAISE INCOMES, WE WILL GET MORE WAGE DATA, MORE EMPLOYMENT DATA NEXT FRIDAY WHEN THE NEXT JOBS REPORT IS DUE. CONSIDERING THE SOFTNESS WE SAW IN THE LAST READING, IS THERE A LOBAR FIGURE YOU ARE LOOKING TO CLEAR? WHAT KINDS OF FIGURES WOULD CONTINUE BE AT ON NONFARM PAYROLLS OR THE UNEMPLOYMENT RATE?
JARED: I THINK WHAT WE ARE LOOKING FOR IS TO TRY TO SEE HOW OFF TREND JULY WAS RELATIVE TO THE AUGUST NUMBER WE WILL GET ON SEPTEMBER 6. WE SOLVE THE UNEMPLOYMENT RATE TAKE UP 2/10. A.
COOLER THAN EXPECTED REPORT WHAT YOU WANT TO SEE IS HOW THE REPORT DOES RELATIVE TO EXPECTATIONS. THAT IS A WERE WHERE IS ALSO VERY HARD TO PREDICT. IT IS A HIGH-FREQUENCY NOISE THE REPORT.
ONE INDICATOR WE DO HAVE IS UNINSURANCE CLAIMS OVER THE MONTH OF AUGUST THEY HAVE LOOKED WAY GOOD. . IF YOU LOOK AT YESTERDAY'S NUMBER OR THE WEEK BEFORE.
THEY HAVE BEEN ABOUT WHERE THEY WERE A YEAR AGO. I WOULD THINK. THE EXPECTATIONS WHEN THEY START ROLLING IN BE FOR MONTHS THAT LOOKED MORE LIKE JUNE AND JULY.
IF EITHER WAY I HOPE WE ARE TALKING ABOUT IT AROUND THIS TIME A WEEK FROM NOW. KAILEY: I SHARE THAT HOPE YOU WILL BE BACK WITH US ON BLOOMBERG TV AND RADIO. THAT IS GOING TO BE IMPORTANT DATED TO GET BEFORE THE FED'S DECISION COMING UP.
I'M NOT GOING TO ASK YOU IF YOU THINK THEY WILL CUT OR WHAT SIZE. I WILL TELL YOU THE MARKET IS EXPECTING INTEREST RATES TO BE LOWERED. THEY THINK THEY MAY BE LOWERED TO THE TUNE OF 100 BASIS POINTS BY YEAR END.
WHERE WOULD THAT LEAVE THE U. S. ECONOMY COME JANUARY WHEN A NEW PRESIDENT WILL BE TAKING OFFICE IF WE SEE WHAT HUNDRED BASIS POINTS OF EASING?
JARED: THE WAY YOU TEED UP THE QUESTION, I DON’'T HAVE TO WEIGH IN ON WHAT THE FED IS GOING TO DO. I'M JUST GOING TO ANSWER YOUR QUERY. I THINK THIS WOULD BE VERY CONSISTENT WITH SOME IMPORTANT DEVELOPMENTS THAT TEND TO OCCUR WHEN INTEREST RATES GO DOWN.
THE FIRST THING I THINK OF IS THE MORTGAGE MARKET. WE HAVE HAD MORTGAGE RATES ON THE 30 YEAR FIXED RATE MORTGAGE THAT WERE ABOVE 7%. LAST I LOOKED THEY WERE 64.
A LOT OF THAT IS PRICING IN OF THE KIND OF DYNAMICS YOU DISCUSSED. ONE OF THE THINGS WE ARE LOOKING FOR IS FOR A LOCK IN EFFECT TO GET UNLOCKED. PEOPLE WHO WANT TO MOVE THAT HAVE BEEN HESITANT TO DO SO BECAUSE THEY ARE LOCKED INTO A LOWER RATE THAN IS AVAILABLE ON THE LOWER MARKET -- ON THE MARKET.
CUSTOMER GETS RID START COMING DOWN, BUT UNLOCKS. . I HAVE TALKED TO EXPERTS IN THE FIELD.
WHAT IS THE MAGIC NUMBER? WHAT IS THE KEY THAT UNLOCKS THAT FACT? SOME SAY LESS THAN 6%.
SOME SAY LESS THAN 5%. I THINK THE RIGHT ANSWER IS WHO KNOWS. IT IS MOVING IN THE RIGHT DIRECTION.
ESPECIALLY ONE OF THE THINGS WE SEE IS THESE PRICE MOVES ON THE MORTGAGE RATES GET PRICED IN BEFORE THE CENTRAL BANK MAKES THEIR CUTS. LET'S WATCH THAT AND SEE HOW THAT UNFOLDS GIVEN THE DATA FLOW COMING IN. KAILEY: FINALLY, WHILE WE ARE ON THE SUBJECT OF HOUSING, THAT IS AN AREA IN WHICH KAMALA HARRIS HAS TARGETED WITH ECONOMIC PROPOSALS SHE WOULD LIKE TO PURSUE IF SHE DOES WIN IN NOVEMBER.
INCLUDING $25,000 DOWN PAYMENT ASSISTANCE TO FIRST-TIME HOMEBUYERS. I SPOKE WITH BETSEY STEVENSON OF THE UNIVERSITY OF MICHIGAN ABOUT THAT PLAN YESTERDAY AND WHETHER IT WAS FISCALLY RESPONSIBLE. THIS IS WHAT SHE TOLD ME.
>> I HOPE AS SHE HAS GOT A GREAT PROPOSAL. $25,000 FOR FIRST-TIME HOMEBUYERS IS A GREAT IDEA. LET'S HOPE IT IS BALANCED WITH MAY BE REDUCING THE HANDOUTS WE ARE GIVING TO WEALTHIER FAMILIES WITH BIG HOUSES.
KAILEY: MR. CHAIRMAN, IT RAISES THE QUESTION ABOUT THE PAY FORCE. CONSIDERING HOW HARD THIS WHITE HOUSE HAS TRIED TO FIGHT THE BATTLE AGAINST INFLATION, SAME GOES FOR THE FEDERAL RESERVE, ARE YOU WORRIED SOME OF THESE POLICIES BEING PUT FORWARD BY BOTH PRESIDENTIAL CANDIDATES COULD BE INFLATIONARY IN NATURE IF THEY ARE NOT ADEQUATELY OFFSET?
JARED: I THINK THE RIGHT PLACE TO START WITH THAT IS TO DRILL DOWN ON SOMETHING YOU AND BETSY WERE NOT TALKING ABOUT WHICH I VIEW AS THE KEY PART OF VP HARRIS AND PRESIDENT BIDEN AS WELL AS THERE ARE SIMILARITIES OF THEIR HOUSING PLAN, WHICH IS TO INCREASE THE SUPPLY OF AFFORDABLE HOUSING. WE HAVE A 10 YEAR SHORTFALL IN THE SUPPLY OF AFFORDABLE HOUSING. IF YOU LOOK AT HARRIS'S PLANS WHETHER IT IS EXPANDING THE LOW INCOME TAX CREDIT WHICH IS A TRIED AND TRUE MEASURE TO BUILD MORE AFFORDABLE MULTIFAMILY HOUSING OR SOME VARIANT WERE IN SUBSIDIES ON THE BUILDING SIDE TO HELP PENCIL OUT DEALS IN THE SINGLE-FAMILY AFFORDABLE SPACE, THAT ADDS MORE SUPPLY.
. THAT IS DISINFLATIONARY IN A SECTOR THAT HAS SUFFERED A LONG-TERM SHORTAGE. WHENEVER WE ARE TALKING ABOUT ADDING SUPPLY WHERE IT IS NEEDED AND IS IT NEEDED THERE, SHE IS TALKING ABOUT 3 MILLION UNITS.
I WOULD MAKE A HUGE DIFFERENCE. WE ARE TALKING MORE ABOUT A DISINFLATIONARY IMPULSE.
