Full Transcript for Instant Reaction: US Adds 165,000 Jobs, Topping All Forecasts

we've. 00:03:09 Speaker 8: Seen some big surprises like this earlier in the year, and then they ebb away. So I've got to see some months of this before I'm really convinced we're seeing an acceleration of the labor market. 00:03:20 Speaker 6: But good news is good news. 00:03:21 Speaker 8: And the unemployment rate The overall unemployment rate did tick down with participation going up. 00:03:27 Speaker 6: So, like, that's a good setup. So we're going to take the good where we have it. But we have been head faked. 00:03:33 Speaker 8: By this labor market in terms of acceleration several times this year. 00:03:37 Speaker 4: Paul, am I right? Kevin Hassett of the White House will. 00:03:40 Speaker 2: Be with Bloomberg? 00:03:41 Speaker 4: Yes. Nine-ish? Yes. 00:03:43 Speaker 2: We're going to have him. 00:03:43 Speaker 7: Okay. 00:03:44 Speaker 2: Get his thoughts here. 00:03:45 Speaker 4: Paul Sweeney with Claudia Sam. 00:03:46 Speaker 2: Average hourly earnings on a year-over-year basis, Claudia Sam, came in a little bit better than expected at 3.1%. Are you surprised that number's not even higher given how tight the labor market is? Why can't I walk into my boss and say I need 10% increase if you want to keep me? 00:04:00 Speaker 8: Well, I think the boss will be like, good luck in that job. I mean, that's the thing right now. And I watch really. 00:04:06 Speaker 6: Carefully the quit rate. So we did get an update on Jolt's this week. 00:04:09 Speaker 8: And there was a little tick up, but it's still pretty low. 00:04:12 Speaker 6: And that's a good sign of the bargaining power. 00:04:15 Speaker 8: If workers are out there quitting to get better jobs, that's when they have the leverage for the higher wages. 00:04:20 Speaker 6: It just does— it' s just not there right now. 00:04:23 Speaker 8: If you don't have hiring being strong, the workers just don't have that ability to bargain. 00:04:28 Speaker 7: Can we like do like— there' s no recession talk, but can we do like Claudia Sam wheelhouse here? Sure. Claudia Sam wheelhouse, folks. She's famed for looking at how an economy slows. Let's go to the opposite way, Claudia. So when you studied at Michigan, you never, never thought about a sustained 6% or more nominal GDP. How do you presume with our new politics that we will bring in this boom economy constructively? 00:05:01 Speaker 8: So, you know, there's a lot of pieces to that. I do think going back to the question about immigration policy, labor force policy, like I'm less looking at, you know, the downturn in the labor market, but I am worried about some of the structural pieces of the labor market. And I think without a growing labor force, it's going to be hard to to really consistently have. 00:05:22 Speaker 6: Those GDP gains. 00:05:23 Speaker 8: I mean, I am optimistic about some of our technology improvements on the horizon, but that is really tough to string together quarter after quarter, year after year, improvements in productivity growth, right? And so I think you've got to have a multi-prompt approach in terms of the policy. Hanging our hats on AI is not the way forward. to go in terms of really wanting to keep those strong growth numbers. I think there are some structural pieces on the labor market that deserve attention and may very well get some attention given the election results this week. 00:05:54 Speaker 2: Labor force participation rate, again, a little bit better, 61.9%. Where's a healthy number? Like, what should we be looking for? Is that a good number, 61.9? Should it be higher or lower? 00:06:04 Speaker 6: Yeah, I mean, it is hard. 00:06:06 Speaker 8: You know, work is onerous, right? We don't want 100. People should have a choice as to what they do. I think given the fact that we have so much aging of the workforce. probably keeping a focus on. 00:06:17 Speaker 4: The prime age. 00:06:18 Speaker 6: So yeah, no, I'd say, well. 00:06:20 Speaker 8: You know, people should get to retire at some point if they want to. But I think looking at the prime age statistics, which have been really pretty solid, but there's always, you know, there's the separation of like, we look month to month, quarter to quarter at the labor market. 00:06:37 Speaker 6: And then there's the big picture. 00:06:38 Speaker 8: I mean, we've had some demographic groups that for decades have been puzzling, like men, prime age working, used to all work, and there's been declines over many decades. So then there's questions about why is that happening? But that's not this near-term discussion. So I don't have a ready answer of what's the right number because it depends on people and their lives. 00:06:59 Speaker 4: Spearheading our labor coverage, I should say. Claudia's with us. Thank you. Thank you so much this morning. 00:07:08 Speaker 7: Look for her publications and, of course, wonderful out on Twitter and particularly on LinkedIn as well. With a bigger, broader picture, futures up 10, NASDAQ up where it was pretty much level 1.3%, but yields higher today, 10-year yield by a solid four basis points as well. Constance Hunter joins us, Chief Economist, EI at you and her work with Julia Coronado, Macro Policy Perspectives as well. Constance, I look at this and it's clearly a fully employed America, Link it to what we observed in the election. I see two Americas, and there's an America that isn't in the jobs report this morning. 00:07:49 Speaker 3: Well, if we look at the voter turnout, a lot of the voters probably had jobs, right? So I wouldn't say that this was an election determined by the unemployed. We have a very low unemployment rate. And of course, remember that 33% of the population are made up of independents, and those are the swing votes. 00:08:09 Speaker 6: That put the sort of moderate. 00:08:10 Speaker 3: Democrats in states like Iowa and Nevada and Texas into office, even in Ohio. 00:08:19 Speaker 6: I would say. 00:08:20 Speaker 3: So I think that this election is a reflection

of what's happening in foreign policy with Iran and possibly Ukraine, what's happening with inflation. 00:08:30 Speaker 6: That was the number one issue. 00:08:33 Speaker 3: And it doesn't necessarily mean that that the economy isn't churning and working underneath. It's just people are still feeling the effects of the price, the level changes we had during covid. Then they didn't dissipate. Then we've had another step up in levels. And and that is what people voted about. 00:08:53 Speaker 2: So that kind of goes to the issue. Again, we look at average hourly earnings on an annualized basis, constants of three point one percent. That's better than then forecast better than last period. We had an upper revision for last period, actually, to 3.2%. But that's just not keeping pace with inflation for most people. Something's got to give there. 00:09:12 Speaker 1: Well, it's a double-edged sword, right? 00:09:15 Speaker 3: Certainly what we don't want to see is we don't want to see runaway inflation that's demand pull. And so what we see here is a lot of costs push inflation, and the Fed is trying to curb that. 00:09:27 Speaker 1: You had Beth Hammack and Barkin. 00:09:29 Speaker 3: Coming out yesterday, Barkin, who will be a voter in 2027, saying the Fed should raise rates. And what I'm looking at in this labor market is sort of how durable is it? And when we look at things like the diffusion index, we had a solid increase there. 00:09:43 Speaker 6: And one of the things that I've been watching. 00:09:44 Speaker 3: This year is the mix of cyclical versus non-cyclical jobs. 00:09:48 Speaker 6: And now let's remember the big concern when we were coming off the. 00:09:53 Speaker 3: COVID highs, that we were still having high headline prints, but it was dominated by health care and government. 00:09:59 Speaker 6: And social assistance workers, non-cyclical jobs. 00:10:02 Speaker 3: Now we're in a situation, really starting this year, where we can see a surge in cyclical jobs, and cyclical jobs are dominating the hiring, that suggests that there's some underlying economic momentum. Now, it may take time for people to feel that, but it's certainly there in the data. 00:10:22 Speaker 2: So given the labor backdrop, what's your view of the consumer going forward here? It's kind of, boy, if you have a job, you're in That's a big, big part of the game here. Is the consumer OK? 00:10:34 Speaker 9: I think the consumer is OK. 00:10:36 Speaker 3: And a lot of it is going to depend what does happen, for example, with the Iran war and with gas prices. You know, we're getting oil out of the Gulf because we are engaged in escort operations. But it's very expensive to get that oil out. And so the market, the oil market, is pricing in all risks around that. If we see a resolution to the Iran war, and you see a really. 00:11:01 Speaker 6: Durable a structure. 00:11:04 Speaker 3: Built around getting oil and gas out of the Gulf of Hormuz, or the Strait of Hormuz, then you're going to see oil prices come down. That's going to give immediate relief to people's pocketbooks. 00:11:14 Speaker 7: Constance, what are you going to write about this weekend? Folks, commercial free for you for the next 20 minutes. Christina Katmany coming up with Invesco, but right now, Constance Hunter, EIU. What are you going to write about this weekend? I mean, you have such a broad mandate. I'm just fascinated. What's the Constance Hunter theme? 00:11:31 Speaker 3: Well, I'm looking at really what is happening with this global AI sell-off, right? So you had Hong Kong down. You had Taiwan down. Taiwan is engaged now in pricekeeping operations to stabilize that market. Where are those fault lines? We still have Japan engaged in this massive carry trade, invested in equities around the world. 00:11:53 Speaker 1: Are we at a tipping point there? 00:11:55 Speaker 3: What is happening with regard to economic policy that the Democrats are going to be able to enact? Obviously, this comes down to the state level, and one of the big themes that the market has been focusing on over the last several days is this sort of curb of AI. 00:12:12 Speaker 6: Build-out. 00:12:14 Speaker 3: Really, the thing is, to what extent is that happening, and are we talking about an end, or are we talking about some more sensible policies that make it more palpable to the general public? 00:12:23 Speaker 7: Right. 00:12:24 Speaker 3: Public is really against the AI build-out, and we don't do anything about it. Then we would have such significant backlash down the road. So I'll be looking at all of this and really thinking about what are the economic vectors we need to look at going forward. But if I were looking at just this jobs report, and not thinking about the shock of the election, I would say that we are on solid footing based on this jobs report. 00:12:49 Speaker 7: Thank you so much. Excuse me. Constance Hunter with us here from EIU. The last time Christina Kampany came in, for whatever breaking news reason, we were so rude. 00:13:00 Speaker 4: You were here for. 00:13:03 Speaker 7: Two questions or something, and Vesto called up from Atlanta and said, how can. 00:13:07 Speaker 4: You treat her like that? 00:13:08 Speaker 7: So for a long conversation this morning, Christina Katmany on this crazy global bond market and what it says to us. 00:13:17 Speaker 4: Were you in college at Villanova with Jalen? 00:13:20 Speaker 1: I wish I could say I was. He's a number of years younger than me. But we have cheered him on. 00:13:26 Speaker 2: They're just over in Rome? Yes. 00:13:29 Speaker 1: Yes, they were. 00:13:29 Speaker 4: Did that work out? Did you go? 00:13:31 Speaker 1: We did not end up going. 00:13:32 Speaker 10: I was actually in Rome with a Villanova crew in May. But I feel like with the marathon and Halloween and the little kids, stayed stateside this time. 00:13:42 Speaker 4: We're dying on yield this morning. 00:13:44 Speaker 7: What an honor to go

from Priya Misra to you, Ira Jersey, coming up. later with Tony Crescenzi as well. As I said, in this blur that we're all in, what will you write about or think about through the weekend on Yield? 00:13:58 Speaker 10: Well, it's interesting because we were even saying coming in today, like... It's payroll Friday. 00:14:03 Speaker 2: I completely forgot. 00:14:04 Speaker 10: And you're like, the market is most not focused on payrolls. And again, that's a big number. Those are big revisions. Even if you look at the three-month, I was looking, there are three-month moving average now for payrolls is 119. The six-month is only 73%. There's sort of like big gaps, but I don't think that's where the market's focused at all. I mean, it's been such a roller coaster week between elections and changes in oil prices and what's going on in the Middle East and obviously equity markets and AI. 00:14:33 Speaker 1: And it's just this confluence. 00:14:34 Speaker 10: Everyone's like, where are we and what is the driving path forward? And it feels like there's a lot of like fear and agita in the market for sure. 00:14:42 Speaker 2: How did the debt markets change? perform over the last few days? Because even during all this craziness, Meta came to market again with your bond offering. So, I mean, how's the bond market these days? 00:14:54 Speaker 1: We've actually, again, we sold off. 00:14:57 Speaker 10: I mean, it's been a drift to higher yields across the board across the curve across the globe all year. And we kind of got the peak five or six weeks ago. And for five or six weeks, we've retraced 40, 50 basis points kind of in every point across the curve. It feels a bit overdone. I think some of that was positioning. I think some of that, again, is this fear about AI. But I'm not sure that the underlying has changed so much. We also, I think, are still grappling with this Fed that's doesn't want to have forward guidance from the chair, but the rest of the committee is giving forward guidance, and we have very different messaging meeting to meeting. I think there are people out there that think there are real recession fears and this is the end of AI. 00:15:43 Speaker 1: We're a little skeptical of that. 00:15:44 Speaker 10: I think the base case is still that the Fed is going to go in December. 00:15:48 Speaker 1: And if you didn't get that. 00:15:49 Speaker 10: Communication ahead of the last inflation prints, you would have expected them to go in October as well. 00:15:58 Speaker 2: All right. So, again, the Fed probably is going to do what it does in markets pricing in certainly one for December, maybe one or two more for next year. But, again, I kind of go back to all the craziness this week about AI and about what it means for AI. Again, Meta just came out with this mega euro bond offering. So it kind of feels like the market. 00:16:18 Speaker 4: Did you buy it? 00:16:20 Speaker 10: We have been a bit cautious on some of the hyperscaler issuance, so we were

not involved. But I think the market is also grappling with there are these massive CapEx numbers out to 27, 28, 29. 00:16:34 Speaker 1: And so I think. 00:16:35 Speaker 10: It's a question of does this blue sweep, does that change the speed of all of this buildup? 00:16:42 Speaker 1: Does it change that? 00:16:43 Speaker 4: I love that. It's about the speed. It's about the first and second derivatives. 00:16:47 Speaker 1: I think it is. 00:16:48 Speaker 10: I mean, we have had just exponential growth. And CapEx has been what has driven U.S. growth this year, right? That's not a deniable thing. It has been in the driver's seat. But I think people are still credit spreads have moved but are still tight by historical standards. I think People are being choosy and they know that because of this pipeline, there's a lot more to come. 00:17:15 Speaker 1: But I mean, deals are still being taken down for sure. 00:17:17 Speaker 4: Absolutely. 00:17:18 Speaker 2: Focus this week here was on U.S. domestic elections. You guys think globally. So what's your non-U.S. call these days? 00:17:27 Speaker 1: So I think FX is a little trickier. When we take a step back, we. 00:17:34 Speaker 10: Still are a bit more negative, the dollar. But that has been a bit challenging. You haven't had participation from Asia. I think that is, or dollar Asia. And I think you need to see dollar Asia resume lower. So the likes of the yen finally participating and strengthening. Corona coming back to the table. Some of those to see a broader FX rally, weaker dollar. 00:17:58 Speaker 6: Okay. 00:18:01 Speaker 10: And then globally, again, we still say we've rallied now 40, 50 basis points in the U.S. The rally has been driven by the– or has been led by the U.S. 00:18:10 Speaker 1: More than the rest of the world. 00:18:11 Speaker 10: So we do still think that there's value in some– we think Europe has probably more value. It's a kind of weaker underlying growth system. 00:18:20 Speaker 1: And– In EMs, too. I mean, Brazil, obviously. Was that only this week? 00:18:25 Speaker 11: I know. 00:18:25 Speaker 10: The second round election, maybe that was last week. 00:18:27 Speaker 1: I don't know. It's been a whirlwind. It's been nuts. October was a long month. 00:18:35 Speaker 4: Rob Waldner of Invesco wore a bow tie. Oh, yeah? I'm sorry. 00:18:41 Speaker 1: He had to match your style. 00:18:43 Speaker 7: It was amazing. Rob Waldner driving all the research at Invesco. So let's summarize this for mere mortals. I mean, you and Paul are like pro-discussion. In this uproar, if I have fear of missing out in the Christina Katmany world, am I buying credit? That's a Paul Sweeney question. Am I extending duration? How do I express fear of missing out Because to me, what no one's looking for is price up, yield down. 00:19:13 Speaker 1: Yeah, so it's funny. 00:19:14 Speaker 10: Our latest big right on our whiteboard in the office says less FOMO. So we're not doing fear of missing out. But I think

a global fixed income portfolio still makes sense. We don't have to just be concentrated in the U.S. We're coming off. 10, 15 years of U.S. exceptionalism, we still think there's a case for. 00:19:33 Speaker 6: Global fixed income. 00:19:35 Speaker 4: Can you buy French paper? 00:19:37 Speaker 1: Not before the election, no. There's no need. We need to be wise about our choices. 00:19:42 Speaker 9: I think, again. 00:19:44 Speaker 1: I love harassing her. 00:19:46 Speaker 4: Thank you, Cy, for that question. 00:19:48 Speaker 2: It was very rude. 00:19:49 Speaker 1: We have another. 00:19:49 Speaker 10: six months before the election in France. I think it will be noisy. Will there be opportunities to play? Yes. Are European government spreads exceptionally tight? 00:20:00 Speaker 1: Absolutely. 00:20:00 Speaker 4: So what that comment was is so Rob Waldner hears her say that, so she gets a junket. to Paris to do research, Bob. 00:20:10 Speaker 2: Post-election, absolutely. 00:20:11 Speaker 1: I'm heading to Atlanta next week. Don't get me in trouble. 00:20:14 Speaker 2: Christina, in your portfolio, how do you guard against... AI concentration here, because it's not just owning an Invesco bond or something, but boy, if you own a utility bond in Virginia, that might be. 00:20:26 Speaker 4: Yeah. 00:20:26 Speaker 3: Yeah. 00:20:27 Speaker 10: It really, again, I think it goes back to that has been the driving story and the driving force of the U S economy this year. 00:20:32 Speaker 1: So it has been, it's been utilities. 00:20:35 Speaker 10: It's been the chips. It's been the hyperscalers. It, It feeds into all of these things. We have been, and you guys know this from our conversations, a bit more cautious of our three levers, FX credit, foreign exchange credit, or rates. We've been the most cautious on credit just because of how historically. 00:20:53 Speaker 1: Tight we are. I think that still kind of remains our bias. 00:20:57 Speaker 10: I think- There's still not really a case that you need to extend out the curve to duration yet. 00:21:03 Speaker 7: One question from Stephanie Ross. People are like, let's get to Stephanie. I'm like, okay, I got one more to Christina here this morning. I can't emphasize enough the hysteria around hedge funds, bonds. 00:21:16 Speaker 4: What is it? 00:21:16 Speaker 7: Coreweave? 00:21:17 Speaker 2: Yeah. 00:21:19 Speaker 4: It's like a 16%, 15% yield or whatever. 00:21:22 Speaker 7: How should our listeners and viewers separate the noise of AI garbage paper from the real world of capturing a coupon? 00:21:32 Speaker 1: Look, I think. 00:21:34 Speaker 10: like anything else, like with stocks, with bonds, especially as an individual investor, to go be chasing the one name, the highest yields, like there's obviously all inherent risk in that. I think broad portfolios, diversification, you want exposure to the theme. And I think when we take a step back, the theme of AI is because of the election or because of a wobble in the equity markets is not going. 00:21:58 Speaker 6: Away, right? 00:21:59 Speaker 1: The pace may slow down. 00:22:01 Speaker 7: The. 00:22:02 Speaker 10: Way it's implemented may change, but I don't know. Even we look at our own world and how your job has changed in the last six months and what we're trying to incorporate. That's not stopping on the switch of a dime, right? 00:22:14 Speaker 4: Christina, thank you. Christina Kemeny with Invesco here this morning. Greatly appreciate it. 00:22:19 Speaker 7: As we go to Stephanie Roth here, we say good morning across America. I guess it's a fully employed America. Changing nonfarm payrolls, two-month revision. Even I could do the math. $ 249, 000, a big 165 number, plus $ 84, 000. A nice revision upwards. A lot of other data which bent price down, yield up. The 10-year yield now three basis points. Two-year yield explodes. Higher yield by six basis points. Stephanie Roth to look at the economics of the moment. Stephanie, can you program out with this jobs report, with the inflation reports, with the data, can you program out a continued buoyant nominal GDP rate? 00:23:06 Speaker 9: Yeah, I think that's the environment that we're in. 00:23:08 Speaker 11: I think it will be slightly less than where we've been running. You're probably talking more like a 4.5% nominal GDP for 27 as opposed to something that's notably higher. 00:23:16 Speaker 6: As where we've been. 00:23:16 Speaker 11: But it's still a robust economy and one that's incrementally going to be driven by real growth as opposed to inflation. 00:23:24 Speaker 6: This year. 00:23:25 Speaker 11: you know, the mix was a bit different because inflation was just running so hot for a variety of reasons. But like overall, the economy's buoyant and it's not just AI. The economy's running on firm footing outside of just the sort of the AI CapEx space. 00:23:39 Speaker 2: So again, the change in non-farm payroll data we got today says, you know, the U.S. labor economy is in pretty good shape. 00:23:44 Speaker 4: All right. 00:23:45 Speaker 2: If that's the case, let's turn to inflation here. What's your inflation call for 2027? Because I've got, you know, energy prices whipping all around here based upon whatever the latest tweet is. 00:23:55 Speaker 11: Yeah, well, when you think about sort of forecasting into the future, energy prices are. 00:23:58 Speaker 9: Not going to repeat. I certainly hope they don't. 00:24:00 Speaker 11: Repeat what happened in this year in terms of sort of year-over-year growth rate. So you're naturally going to get disinflationary pressures from oil prices, even if. 00:24:09 Speaker 9: They stay where they are. And there's good reason to believe that. 00:24:13 Speaker 11: Oil prices may sustainably come down a little bit. Therefore, you're going to get disinflation on a year-over-year basis from the things that were elevated this year. So anything related to sort of energy prices, anything from airfares, you're

going to have the. 00:24:28 Speaker 9: Tariffs roll off the data. 00:24:31 Speaker 11: All of these factors that kept inflation elevated this year because they were largely one-off will fade into next year, and we're looking for about 2.5% inflation, which is certainly higher than what the Fed would like, but something that's a lot more tolerable. 00:24:43 Speaker 4: Stephanie Roth goes right to where I want to go. 00:24:46 Speaker 7: It's like the budget lab at Yale, Natasha and Martha and all that. Stephanie, do you frame out an amendment to our tariff policy given the political bombshell two days ago? 00:25:00 Speaker 9: Tariff policy is largely unchanged. 00:25:02 Speaker 4: Really? 00:25:03 Speaker 11: The revenues are kind of too high to really make any adjustments from that perspective. 00:25:07 Speaker 9: So tariffs are going to remain. 00:25:08 Speaker 4: Come on. Come on. Stop. 00:25:09 Speaker 7: We're addicted to tariffs at a fiscal basis. 00:25:13 Speaker 9: Kind of at this point. 00:25:15 Speaker 11: And I don't even think even if we have a Democrat in, you know, when in 2028, I'm not even sure they're going to bring down tariffs all that much, maybe on a targeted basis. 00:25:24 Speaker 9: But My expectation is the tariffs. 00:25:27 Speaker 11: Will remain elevated for quite some time because from a deficit perspective, it's not really attractive to trim them so much. 00:25:34 Speaker 7: I believe my recollection is the president of the United States touched on this with our John Micklethwaite in conversation. OK. 00:25:41 Speaker 4: Once the tariffs are in. They're like an addiction to politicians. 00:25:46 Speaker 2: Yeah, I guess so. 00:25:46 Speaker 4: You and I are paying them. 00:25:48 Speaker 7: Yeah. 00:25:48 Speaker 4: Look at the tariff on your Vespa. 00:25:50 Speaker 3: I know. 00:25:50 Speaker 4: That was unthinkable. 00:25:51 Speaker 2: That was unthinkable. So, Stephanie, given this backdrop here of a pretty firm labor market, a market where in 2070 you should see inflation come down somewhat, what does that mean for our Federal Reserve then? 00:26:04 Speaker 9: So base cases, they still go in December. 00:26:07 Speaker 11: They get that markets have been pricing the odds down the last couple of days, just given the concerns around AI. Provided that the financial markets kind of hold up well enough between now and the December meeting, they're very likely to go in December. 00:26:20 Speaker 9: They certainly communicated that they want to hike again. 00:26:22 Speaker 11: The data have been firm. It's not accelerating a bit. And then we think they'll probably go once more at the beginning of next year in Q3, probably at the March meeting. And then at that point, you'll see the inflationary pressure subside a bit. You might see activity cool down modestly. 00:26:37 Speaker 9: And then the Fed can just kind of wait and see. 00:26:39 Speaker 11: And then they'll be kind of on hold for quite some time. 00:26:42 Speaker 2: So, again, that's a pretty interesting backdrop because that sounds like things are generally in pretty good shape. How do we think about it from the consumer level? Because, again, we have the K-shaped economy, but we don't see it in consumer spending. Consumer spending continues to hold up pretty well. 00:26:59 Speaker 9: Haste for a lot of this year. 00:27:00 Speaker 11: The consumer has held up really well, even though the bottom end of the consumer has certainly been a lot more challenged than everybody else. But because the strength has been persistent across the spenders that spend more, it's been masking any softness. 00:27:18 Speaker 9: That's been happening at the bottom. That will probably just continue. 00:27:21 Speaker 11: We're likely to see, especially given the data that we got today, is just further confirmation that the labor market is good. you're likely to see spending continue to remain fairly robust. It's largely a function of nominal income growth, which is tied to the labor market. How much are people working? How much are they getting paid? All of those trends are moving in a positive direction. Energy prices, you know, the margin might come down a bit, which could then fuel a bit of a pickup in consumer spending for next year.