The WAY to WOW Shows
Economic Echoes
December 17, 2025
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[0:00] [music] Who are you? And where are you going? What do you want? [clears throat] Hello and welcome to People Making Money. I'm your host, Kevin Bemel, and I'm here every Wednesday at 10:00 a.m. Pacific time to talk about job hunting, starting and running a business, and building wealth, all the financial aspects of life. So, today is our monthly, excuse me, [clears throat]

[0:35] economic echoes, our last one for 2025. And we're going to be as as I always do breaking down um the current economic data that at least the data that we have and talking about how this might affect the decisions that we make for ourselves and our family members or you the people for whom we're responsible. So let's uh let's jump right into things and wait a minute. Here we go. [clears throat] Okay. So, I'm going to

[1:10] start off as I typically do talking about inflation. [clears throat] And as you may know, uh, the consumer price index published by the Bureau of Labor Statistics hasn't been updated since September, since the September numbers anyway, since October. And uh I I I found this other uh index called the True Flation US Inflation Index that I I that appears to be at least as accurate as the CPI, maybe maybe more. So uh now

[1:47] the interesting thing is it [clears throat] reports uh yearon-year inflation at 2.6% up. 02% from uh the previously reported time period and [clears throat] pardon me. So um and it reports that that and it says that the BLS is reporting a 3% rate. I I assume that that's the last that's based on the last time uh the consumer price index was published by uh

[2:22] the uh the um Bureau of Labor Statistics. But in any event, you can see that the true inflation index is considerably lower than the CPI, almost a half a percent. And a result that would tend to indicate that inflation is better under control than uh how the government is perceiving it. Um and if you look at the chart for the last year, okay, most of which the current administration has been off has

[2:58] been in office. So you can see that um it it is down a little bit from the high of the year. The high of the year uh was a little over 3%. Okay, so it's down right now to 2.6% uh as of yesterday. and and at one point it was down as low as 1.22% okay in April. So the inflation rate went way down until April and it's been building back up since then. Now it's interesting to note that uh what hap one

[3:34] of the things that happened in April is the new the not the new that the tariff regime was imposed and so um you know in inflation seems to have gone up anywhere from roughly a half a percent to one and a half% uh since then. Um, is that only attributable to the tariffs? Almost for sure not. There are lots of factors that go into what causes inflation. Um, but

[4:09] it could be partly due to the tariffs. So, we'll we'll have to see how that plays out. Uh there is a decision um pending from the Supreme Court on the constitutionality of uh the president imposing tariffs uh without the direct consent of Congress. We'll have to see how that plays out. Uh so digging down this a little bit. Oh no, I don't have access to that. Okay. So let's look at the composition now of various the various categories. So or the composition of the infl of the

[4:45] inflation index looking at different categories. So the rate of inflation on food and beverages about 1 point these non-alcoholic food and beverages I should say uh I'm sorry food and non-alcoholic beverages. So it's 1.3% or half of the overall rate of inflation. Okay. So food costs have uh the rate at which food costs have been increasing has slowed uh significantly from the beginning of the year where it

[5:20] was over 4%. For much of the year it was around the 3 to 3 and a half% range. So the rate at which food prices are increasing has declined uh quite a bit this year. Hopefully that will give us all [snorts] uh some relief in terms of housing. So again you can see housing it has cooled somewhat. It's currently at a little over 1%. Okay. And that's down by half from the beginning of the year. Although you can see it's been bouncing in the range of about a half a percent to one and a

[5:57] half% for most of this year. So, we're we're kind of at the mid range. Um, but but nonetheless, you know, a one or in this case a 1.17% inflation rate in housing or 1.15% inflation rate for housing, you know, not not particularly significant. And and again, that should, you know, as wages catch up, hopefully hopefully wages are increasing at a higher rate than um [clears throat] excuse me, than uh uh than the rate of

[6:32] inflation. So, we'll start to feel like we're catching up. I want to go back to one thing uh in and and that's you notice down here relative importance. So, food and non-alcoholic beverages make up a little bit more than 15% of of um of the uh of the of the factors that go into determining the overall inflation rate. So, that's pretty significant. Housing is a little over 23%. Okay. Now, in a place like California, housing is going to be a higher percentage. Uh but but so this and this

[7:09] is looking at you know nationwide. Okay, let's look at transportation. Transportation makes up almost 20%. And it is currently at about a little under 2%. That's down by half from the beginning of this year. Uh but but still pretty significant. Okay. So uh you know it again the the rate at which the cost of transportation is increasing has slowed significantly from the beginning of the year but it's it's still of the of the various factors it's still pretty

[7:44] high given that especially given that it makes up almost 20% of the overall inflation rate. Utilities on the other hand this this is an interesting one. Notice it was at around 9% the beginning of the year. it's now at almost 12%. So the rate at which uh electricity etc has in uh is increasing has gone up significantly and and look for the period from March through July it was you know essentially

[8:19] 0 to 1% it's gone way up. So the rate at which utilities are are increasing is quite high. However, its relative importance is about 6%. And so even though it's increasing pretty rapidly as an overall share of how it's impact impacting our cost of living, it's pretty small. Okay. So that makes it perhaps a little bit easier to bear. Uh health care costs um are basically on par today at about 3% with where they

[8:56] were the beginning of the year. they did spike in uh August the sort of August period and have since come back down again. Okay. And health care makes up about 8 and a half% um of of our overall cost of living. Now obviously these are averages. So uh you know for you if you're young and and and healthy so you know health care costs may have little or no influence or no impact on your uh on your cost your

[9:31] personal cost of living. Okay. And so um but but in any event 3% is is a pretty significant rate little under 3%. Okay. And and if you're if you're older like me um and not in good health, which overall thankfully I am, so health care costs may may make up more than 9% and therefore they uh they have a a larger impact on your cost of living. Okay. Uh household and daily items. Uh these are like supplies, furnishings, equipment.

[10:07] You can see they started out the year at about 2.7%. They are now double that, actually more than double that at almost 5.9%. And they've going been going up pretty steadily uh since well since about uh late May or miday. Now, this is something that I think is probably influenced by tariffs quite a bit because many of these uh household uh durable and daily use items formally came or well not formally

[10:45] come from um and probably still do come from China, uh Vietnam. In other words, they're they're imported and so the tariffs would increase their prices. So the the thing about tariffs is in some cases importers and suppliers have essentially absorbed the cost of the tariffs by lowering their profit margins. Um and I think that that's probably what you saw in this period. They went up a little bit in sort of the July to October period, but now I think

[11:21] they're looking, you know, to pass the the costs of those tariffs on to consumers and and that's why we're seeing a a a cost increase of almost 6%. Now, uh as as a share of cost of living, they're only a little over 7%. Nonetheless, uh 7% is not insignificant and a 6% inflation rate is is high. Okay. Alcohol and tobacco started the year at a little over 3%. Um they're now at a little over 4%. Um but you can see

[11:57] for most of the year they've kind of bounced around the 2 to 4% range. So, um, you know, not not a I think a particularly significant change year-over-year. They only make up 2% of our cost of living. Uh, unless you're someone like me, like I do a show where I mix a cocktail every week. So, they may make up a little bit more of of my cost of living. But in any event, uh while the inflation rate is high at over 4% for for most of us, the the share in our cost of living is very low. So the

[12:34] the the increase in uh alcohol and tobacco costs is is probably not a big driver of lack of lack of being able to u buy what we want. Okay. Clothing. So again, you see that it started the year at about 2.5%. Uh it's coming in now at more than double that of 5 and a4% essentially. And you can see it's been going up steeply since September. now clothing and and and by the way it was it was it was going it was getting lower until

[13:13] uh the middle of March and then it spiked and then it went down again and then it spiked back up. Now, clothing is also something a lot of clothing is imported into this country. Whether it's high-end or low-end clothing doesn't really matter. Very little of of the clothes we buy, [snorts] pardon me, are um made in the United States. Let me correct something here. You notice they there was deflation in clothing uh going until the end of March. clothing prices were declining by over 3%. Uh and then they went back up

[13:48] again. Uh and then they they in in September they they u deflated again but now they're in inflation territory. So clothing is something that is impacted by tariffs as well. Whether it's very cheap garments that are made in places like uh Malaysia, India, China or expensive garments that are made in places like Germany, Italy um you know all all of those are not the United States and so their their garments are being tariffed. Now, I was

[14:24] talking to uh one of the people at um an Italian um clothing high-end clothing store called 11T. And I was asking him uh how are tariffs affecting their business? And he said that they meaning the the leadership of 11T uh made the decision to absorb the tariffs and keep prices pretty much where they're at. Now, uh this is a a a luxury clothing store and so their prices are pretty high. Um to give you an example, uh an

[15:00] unconstructed sports coat and you're talking about $2,400. Okay? So, you know, they a store like that can can afford to absorb uh the cost of the tariffs. So, while they might have made $1,000 or $1,200 on that jacket before, maybe now they make only $800 and but that's still $800. That's still pretty he hefty uh profit to make on on one, you know, one item. Uh, and so, um, higherend clothing stores maybe have been able to absorb some or all of

[15:36] the impact of tariffs, but lower-end clothing stores, H&M, um, uh, you know, that that sort of um, you know, level. So, margins are much thinner. Number one, even if they're keying, which means that they're they're, you know, manufacturing or buying a garment for, let's say, $20 and they're selling it for $40. Keying means they're selling it for twice the cost to twice their cost to produce or acquire the garment. You can see if they're selling a garment for $40, but but $20

[16:14] is their gross profit, there's still not a lot of money there to pay tariffs. And so, um, while on a percentage basis it might work out the same, um, but if you're if you were getting $20 per garment before tariffs and now you're getting only, you know, maybe 12. Okay? So, that that leaves a lot less money to pay for overhead and all the other expenses for running your business. And so, you're more likely to pass on those costs to your customers. And I think that's what at least part of what we're

[16:49] seeing here with the rise in the cost of clothing and footwear. Okay. Next. Oh, um, and by the way, clothing makes up 4% roughly of cost of living. So, it is a relatively small part. Uh, but you know, nonetheless, an almost uh six over 5% inflation rate. Very high. Okay. Communications. So started the year actually deflating. It spiked up for a while. Um but now it is at essentially the same deflation rate about a half a percent as it started the year at it

[17:26] start well it started the year at about minus 3% now it's at it's deflating faster than that minus four 5%. So, and communications uh make up a little over 3%. So, not a big impact on our cost of living. Uh and and you know, even at its height, it was maybe inflating at about 1%. Um and and at one point it was deflating at over a percent and a half, but not not a significant factor I think in our cost of living. Education, okay, started the year at a rate at an inflation rate of almost 3% got as high as three and a

[18:02] half. It's now at about 2.4%. So, it's declined a little bit year-over-year. You can see it's been pretty volatile. The low is about one and a quarter. The high is about three and a half. Um, however, overall given the small impact on the cost of living that education costs have about two and a third percent. So, you know, a a a rate even on on the little bit on the higher side of 2.4% 24% probably not causing uh you know a a lot of um difficulties in terms

[18:38] of the cost of living. Now that that of course depends on if you have two or three kids in college. So it's likely that the relative importance of education costs are much higher for you and you may be feeling a squeeze as a result of the 2.4% 4% uh increase in costs more acutely than someone like me who has, you know, zero education costs. Okay. Finally, recreation and culture has been

[19:13] on a pretty steady increase since the beginning of the year. It did drop initially in January, February, but since the middle of February, it's gone. It's been pretty consistently on an upwards trajectory. Right now the current rate is over 3%. That's up from about 2/3 of or I guess uh you know what 8 8/10en of a percent a year ago. Okay. Now the interesting thing is recreation and culture makes up over 5 and a half% of our cost of living. So this would be things movies, plays, uh sporting

[19:49] events, etc. I I will say I was shocked at the cost just to park at um I think it's what is it called? Crypto Arena or whatever. I went and saw a football game earlier this year. The cost to park for just that one event was I believe $175. Okay. that's now um a business associate had invited me so I didn't have to pay for the ticket but but but I was really surprised at the cost of parking. I'd never p that's the most I've paid for parking in my life. Um

[20:26] but look for people who are really love sporting events for example there's you know there there's not much elast elasticity in demand people are going to go and cheer on their favorite team right and so I think that's part of what you're seeing here is um uh you know whether it's movie theaters or whatever they're looking to push prices if they can uh and and and and they're being successful. Okay. So, if you're a big consumer of recreation and culture, you may be fine find finding a bigger impact

[21:03] on uh what you can afford um be you know beyond what amounts to about a five and a half% of your cost of living. And then finally others this is sort of think personal care products and that sort of stuff. You can see that there's been a big drop here from over 3% to deflation of a third of a percent. Okay, now this is interesting because a lot of personal care products also are imported and you can see they've been pretty consistently in the 2 to 3% range until mid November

[21:40] and in the last month they've dropped from an inflation rate of 3.1% down to a deflation rate of 3 of 34%. That is a 3 and a half% drop in the last month. Uh I I you know I've thought about this. I I can't tell you why I think there's been such a big drop. It this would be counterintuitive for products that are coming in from overseas where they're being tariffed. Um there's no reason to think that the ingredients that go into these kinds of

[22:16] things uh are less expensive. Um you know I can't think of an explanation. This could be an aberration in the data. Uh but uh if you know if you use a lot of personal care products, so presumably at this point you've seen not only a a a drop in the rate at which they're increasing, but you've actually seen prices declining. Uh that's what deflation is. So um so again depending on what is your what are the actual things that you buy okay your experience

[22:52] of a of inflation could be changing significantly. Now the the the the sort of main drivers here which are food food and non-alcoholic beverages uh at 15%, housing at 23 together that makes up 38%. Transportation makes up another roughly 20%. So we're at 58% and utilities make up six. So together these four make up about 23 of our cost of living. Uh most of us are probably not experiencing

[23:27] these at a significantly lower impact on our overall cost of living than about 2/3. Here in California, they're probably more than twothirds or well, here in in urban California, places like Los Angeles, San Francisco, San Diego, where the cost of housing is very high, they could be, you know, closer to making up 70% in a in a place where the cost of living housing is much lower. uh Nebraska. Okay, maybe it's only 55% but still somewhere between half and

[24:03] about twothirds of our cost of living is made up by these top four items here. And you can see uh they are they are all um increasing at somewhere between one to two uh percent with with utilities being the biggest increase. And so I think if you're feeling kind of strapped, it's because um despite the fact that inflation is down um pretty significantly for most of these uh since the beginning of the

[24:38] year, prices are still increasing overall. The inflation, the rate at which they're increasing has slowed, but they are still increasing. And so I think that is what's driving the sense that um people are feeling strapped. Let's take a quick um break and I'll be right back. When life brings unexpected changes, managing inherited property shouldn't add to your stress. Magnum Properties specializes in probate and trust real estate management. We handle the

[25:14] complexities while you focus on what matters most. From property maintenance to tenant relations, from legal compliance to maximizing value, we're your trusted partner through every step. Magnum Properties, Inc., turning property challenges into peace of mind. Call us today at 213-264-4396 or visit magnumprops.com. So, we're back at our uh monthly economic echo show looking at the economic data and talking about how it

[25:50] may affect us. So, we I just talked about the inflation rate. Now, let's go on to uh employment. Okay. So, let's look first at the ADP employment numbers. Um the um Bureau of Labor Statistics did publish some figures. I'll talk about those in a moment. But for November 2025, according to ADP, private employers shed 32,000 jobs. Okay, so we're still at slightly under 135,000

[26:26] people uh employed in um private employment. uh by industry. You can see um the biggest im employers are um uh well this this is uh let's see okay so yeah so education and health services 25 almost 26,000 professional and business services about 225 leisure and hospitality about 175 manufacturing about 13 million uh financial activities about 9 million construction about 8.5

[27:01] million other services about 5 million, information services about 3 million and then natural resources and u uh mining are at about a little under 2 million. Okay. So you can see uh the breakdown there and uh you know ho how how these uh um you know where where these sit as of uh no no I think it's actually November. It's saying October 2025 here, but I think it's actually November. Okay. So, that's the breakdown by industry, by um by uh the size of the

[27:40] firm. Okay. So, uh one to 19. Well, actually, let's go let's go down. Let's look at the region first, then we'll look at size. So, um in terms of regions, the South Atlantic employs the most with about 26.5 million. The Pacific next with about 23 million. The north the east north central about 19 and a half. Mid-Atlantic 17 and a half. West south central 16 and on down from there. Okay. So you can see where [snorts] most of the jobs are concentrated. Okay. Now this is I think

[28:18] uh in interesting here. So you'll notice that small firms lost about 120,000 jobs. Okay? 1 to 19 employees and 20 to 49 employees. So the smallest firms lost 120,000 jobs. Midsized firms 50 to 249 and 254.99 actually gained over 50,000 jobs and large firms with 500 or more employees gained 39,000. So what's going on in the labor market is

[28:53] small firms are shedding jobs faster than mid and large firms are gaining them. And that's why we saw an overall decline of 32,000 jobs. Okay. Where are the changes happening? Well, natural resources and mining we uh we saw an 8,000 job increase whereas construction went down 9,000 and manufacturing 18,000. Okay, those are in the the the goods ends of of the uh of of the equation. In the services end, trade,

[29:29] transportation, utilities went up a thousand. But, and here's where you see the big losers of jobs. Information down 20,000. Financial activities nine. Professional and business services dropped 26,000. Health and education and health services went up 33,000. Month after month, year after year, this has been the big driver driver of job growth. Even though we're looking at private sector jobs, a lot of health services jobs are driven by government spending because Medicare and Medicaid programs make up such a large

[30:05] source of funding for health care and therefore health care jobs. Now, leisure and hospitality jobs went up 13,000 and other services went down by 4,000 jobs. So, that's ADP's picture. uh not a strong employment picture which is I think why we saw uh the Federal Reserve drop interest rates um this just uh I believe it was last week. Now let's look at the uh paychecks uh small business index. This is looking again just at small

[30:42] businesses. Now there this is these are the numbers for October. Okay. The index is at 99.2. 27 it dropped by almost 8/10en of a percent. Which means that job growth well there's actually job shrinkage in small businesses which matches what we saw with the ADP survey. Now let's look at the regional performance. So in the west had the worst. It saw a drop of 1.34. Uh Midwest ne next worst with a drop of

[31:19] a little over one. The Southeast dropped a little over 3/4. The South was the strongest but still a drop of 0.25%. Okay. So overall um the number of jobs uh shrank um uh AC across the country for small businesses. Okay, let's look at the stateby-state performance. So, uh, the only a few states, um, most, well, actually, they're across the region. So, North

[31:54] Carolina saw job growth. So did Ohio slightly. So did Arizona a little less slightly, and Pennsylvania, Indiana, and Texas. Georgia would just not didn't quite make it to not shrinking or growing. But then the rest of the states on this list, you can see all saw um jobs shrinking. And what's more notable is this this blue dot here shows you what the situation was for the prior year at this time. So the fact is while

[32:30] North Carolina and Arizona and Pennsylvania and a few other states are doing better than last year, most of the states are like like um Ohio are doing about the same or worse from last year. So the employment picture is showing some deting quite a bit of deterioration. Now looking at metro areas, the only metro area to show grow job growth uh in small for this is again this is for small business in October [snorts] was Phoenix. It had slight job

[33:07] growth. Miami was just slightly below you know holding its own. All the rest dropped. Okay. Denver, for example, show they're at that index of about 95.5, four and a half% uh decline in jobs. And you'll also notice that only Phoenix and Tampa are doing better this year than last year. And that again is it's important to look at because it's showing that overall in the last year employment prospects have

[33:45] uh gotten worse. Okay. Industry performance. So again we're seeing a similar trend. The only place where jobs are growing is education and health services. Everywhere else they're shrinking. And again more to the point in only two sectors, trade, transportation and utilities and manufacturing are we seeing an improvement from last year in terms of job growth. All of the rests are are worse off this year than last year. So we're not we're not seeing great a great jobs picture which again I think is why

[34:22] um we we you know the uh the Federal Reserve uh dropped uh interest rates. Okay. Now let's look at go let's go back to government data. Okay. And this is looking at the civilian unemployment rate. It ticked up in November to 4.6%. We don't have an October number but in September it was at 4.4%. We always look at this in relation to um um I'm going up on the name the um labor force participation rate. Okay.

[34:57] But real quickly, let's look at men. Okay. For for men 20 and over, it it ticked. Uh wait, I think it's Oh, no. They don't have the breakdown, do they? I don't see the break. Oh, yeah. We Okay. So, for men 20 and over, um unemployment was essentially unchanged. For women 20 and over, a little hard to get this. So, um also essentially unchanged. And for teenagers, uh September it was at 13.2

[35:33] and for November it went up to 16.3. So only teens as as an age group saw a significant change in the unemployment rate. Okay. Now let's look at demographics. Oops. Okay. So for white Americans, November, they're at 3.9% versus 3.8% of September. Not a big change. For black Americans, uh September saw 7.5. November at 8.3. That's a very significant change. Again, we need to

[36:10] look at the participation rates before we draw any conclusions. For Asian-Americans, the rate in September 4.4 um changed um no change since September. And finally, uh, for, uh, Hispanics, uh, November 5% and that's that's a half a percent drop from September. So, uh, teens are doing significantly worse. Hispanics are doing better. All the rest of the groups were essentially unchanged September

[36:47] through uh, from September to November. Now let now let's look at uh uh labor force participation rate. Okay. So the labor force participation rate was 62.5% in November up a little bit from 62.4 and so there's been you know overall very little change there uh which is and and there was very little change in the unemployment rate. So this this sort of aggregated picture of employment hasn't changed much. But let's look at

[37:22] participation rate for men 20 and older. Okay, it was at 7.2. It's it was unchanged from September to November for women. Uh we're looking at 58.7 in November from 50. Okay. No change from September, right? And for teens. Okay, so the labor force participation rate in September was 36.3 and it was the same for November. Okay, so the drop in employment uh among teens is due to fewer teens

[38:00] having jobs. Okay, it's not because more teens went into the market looking for jobs and and therefore caused an increase in the employment rate uh in the unemployment rate, I should say. Okay, white Americans, the job participation rate uh slightly changed but not not particularly material. Uh for black Americans, uh the participation rate Okay, so uh black Americans uh saw a 1% increase in labor force participation rate, which would tend to

[38:37] drive the the unemployment rate higher. Now, it's not good to see a higher employment rate per se, but the reason that is that more blacks are entering the workforce, that is a good thing. Okay? More people seeking employment and hopefully finding it overall is a good thing both for the people finding jobs, but also for the economy as a whole. for Asian-Americans uh November 66. Okay, so they saw a.7% uh increase in labor force participation

[39:15] even as their unemployment rate remains steady. So so Asians have done pretty well over the last uh two months. And then finally, uh, Hispanic Americans or Latinos, okay, essentially so, uh, almost unchanged in terms of their labor force participation. And so the fact that their unemployment rate dropped a half a percent, uh, ship means that that that uh, uh, Latinos, Hispanics are doing very very well in terms of employment. Okay. Now let's look at

[39:53] employment by industry. Okay. So this will mirror some of the things that we looked at in the ADP numbers and you can see construction went up. We saw that education, private education, health services went up. Okay, that's what we saw. Okay, the numbers are different. Um I if if you recall um for ADP they said that um job growth in uh education and health services was 33,000. Um the uh Bureau of Labor Statistics say

[40:29] it was 65,000 new jobs. Okay, that's a big difference between the two. Um, in theory the BLS uh numbers are more comprehensive. Um, but uh in in practice all of these labor labor surveys, job surveys, they all they're you know there because of the difficulty in getting data, it's very hard to say how accurate they are. Okay. Now, here's a a big one. Um uh the BLS is saying uh leisure and hospitality

[41:06] lost 12,000 jobs whereas ADP was saying that they gained 13,000 jobs. Okay. So uh it it it you know we're obviously variations between the two. Which one is correct and which one isn't? We're it's tempting to to assume that the government figures are more accurate, but given how they're compiled um and and how over the last 10 plus years uh more and more employers have not contributed data. So, it's hard to make

[41:41] the case that the BLS numbers are uh inherently more accurate than ADPs. Okay. Government uh net net jobs down uh 5,000. So you can see the biggest gainers according to the BLS are construction, business and professional services and private health and education. The biggest losers are leisure and hospitality, transportation, warehousing, government, manufacturing and mining and logging. So very different picture uh between the two. Looking for a moment at the 12 month

[42:16] picture. Again, this is what we've seen for the last couple of years at least. private education and health services have jobs have grown by 775,000 because these jobs are largely supported by government funding. That's why perennially you see that's where job growth is. Okay. Now, uh this is a turnaround from a year ago. A year ago, the number of government jobs was increasing. Overall, they're decreasing. Now, what you're going to see is there was a drop of 265,000

[42:53] federal jobs since President Trump took office. Whereas, and state governments have also shed uh 16,000 jobs, local governments have partially offset that with 161,000 jobs. So, so overall, um, um, government jobs have dropped by about 120,000 and that's that's due largely to the federal government shedding jobs. Okay, so now let's look, we have three more

[43:28] things to look at here. I think we're going to be on time. Okay, let's look at housing, the change in uh, housing costs. So, I always look at California first. Median sales price year-over-year went down a quarter of a percent, not a big change. Number of houses sold dropped by over 4% and median days on market was up by 10%. And you can see um you know that over the last oh you know year or so uh let's look for here we December. Okay. Um

[44:05] prices in California are up a little bit, but you know, they went up and they've come back down and they're continuing down. Um, nonetheless, you know, a median sales price of over $800,000. Housing is is is expensive here in California. Okay. 10 top. Okay. Here we go. Uh, housing supply. Okay. So, number of homes sold has gone went down two almost 2% year-over-year. number of newly listed homes went down over 15% year-over-year. Uh, and and that's um, you know, I think

[44:41] people are seeing, hey, I'm not seeing a lot of price growth. I'm not going to, you know, sell my house or you know, you know, because I don't want to sell into a buyer's market. Okay. And then finally, homes sold above list price roughly u um a third um which is down by 5 and a half% from a year ago. Homes sold with price drops about 23% uh a 3% increase. So you are seeing the market here in California is shifting

[45:16] slightly in favor of buyers. Okay. But the sales to list price, okay, overall homes are selling a little bit below list price, uh, but not a whole lot. Okay. And and I always like to look at this last in California. You can see um where people are move people are moving from California. There's no doubt about that. that continues uh the uh and uh where are and and also states like New York. So any state in blue um is is

[45:54] where people are leaving. The darker the blue, the more people leaving. California had the most people. New York second, Illinois third. And then there's a number of kind of light blue states where either there was a small out migration or there was basically it was basically flat like New Mexico um actually saw zero um pe zero net migration. Okay. On the other hand, the darker the sort of orangeish or orange-ish brown, the more people moving there. the two most

[46:30] popular destinations, Florida and uh Arizona, followed by North Carolina, uh Tennessee, and South Carolina. Okay? And then, you know, Idaho, Maine, uh Michigan, Wisconsin, places like that. Okay? Places like Utah, um where you see this sort of um tannanish color. Interestingly enough, the statistics there are similar to New Mexico. there was net migration was essentially zero. Uh where are people moving to? You can see the cities here.

[47:06] Um several of them are in Florida. That's been the case um all all you know all year long. Uh and where are they leaving the big the big cities in in you know California, New York, DC, Seattle, San Francisco, Chicago, etc. Okay. So, now let's look at another market. Let's look at Omaha, Nebraska. I I always like to look at Omaha, Nebraska because it's so different than California. Okay. Median sales price, $275,000.

[47:43] Essentially flat year-over-year. Okay. Number of homes sold, uh, 341, down almost 15%. median days on market up 8% to 26. Okay. Uh so um the market is is pretty strong and you see right here an 86 uh so it is pretty strong. Okay. Uh sale to list price um uh number of of uh houses um I'm sorry uh homes sold above list price uh a little over 20%. That's

[48:20] down 3%. Homes sold with price drops 35% up 3%. So overall it's it's a it's a buyer market um because homes are selling about 2 and a.5% below list price. Okay. And um so where are people moving to um Omaha from? And you can see it's largely from the usual suspects. Los Angeles, San Francisco, Seattle. Uh this looks like uh DC. Um this is uh this is

[48:58] Boston. Um and interestingly enough, from Dallas. Okay, that's where that's the places from where they're inbound. And um you know, you can see the numbers of people leaving Omaha pretty pretty small. People tend to like it there. Okay. And next, let's look at the rental market. Here we go. Okay. So, here you get um a kind of a summary of the rental market and and and sort of

[49:34] average rents. Let's look at LA, my my hometown. Okay. Month overmonth change, zero. Year-over-year change down $50. Okay. You can see the market is warm but by no means hot. You can see there's a lot, you know, it's a higherend rental market. Okay. And okay, so that that gives you an idea there. And then let's go back and let's look at let's look at Omaha. Okay, so Omaha

[50:10] the um uh average monthly rent went down $25, but it is up $56 from year-over-year. And you can see it's a moderately priced rental market compared to Los Angeles. The conditions there are cool, okay, which means if you're thinking of moving to Omaha and renting, you're in good shape. Okay, so um By the way, as I me I've always uh try and mention all of these links will be in the show notes so you can look at your particular situation and and make

[50:47] decisions based on the places um in which you are interested. I just want to cover one more uh one more um set of data before we uh end here and that is the uh survey of consumers done by the University of Michigan. Uh Paul Donovan, the chief economist at UBS. He poos these numbers quite a bit. Um, if if you if you only listen to one uh business podcast each day, um, you should listen to Paul Donovan at UBS. Uh, it it

[51:23] usually lasts for no more than about three minutes. He is he has the drollst sense of humor in the business reporting world. Um, but he tells it like it is. He also gives an international perspective so you get a sense of what's really going on across the world, not just the United States. Okay, so the index of consumer sentiment in December went up a little bit from November, 4 and a.5% positive change. Current economic conditions though declined a little bit almost 1% 50.7 down from

[51:59] 51.1. So people are not feeling great about current uh you know the current situation but this is interesting index of consumer expectations went up from 51 to 55 an 8% increase so people are expecting things to get better and and that's important. Pardon me. Now year overyear things are still much lower than they you know they're much lower now. Um and over so overall people are

[52:38] more pessimistic than they were a year ago. Okay. Some of the shine has come off uh you know the the current administration. uh but um at least you know for in the short term here we are seeing some improvement overall in the outlook for uh for for the future. Okay. So what does this mean for you? Number one, I I I I say this every month. Look at your specific situation. Take 10, 15, 20 minutes. Use the links in the show notes

[53:16] and look at the data with respect to how you live your life so that you can make decisions that are right for you based on data tailored to how you and your family live your life. That's number one. Number two, um overall inflation has moderated somewhat from a year ago. Okay, but it's still it's still higher certainly than the Fed wants to see it. Um whether we take the

[53:52] uh trueflation's number of 2.6% 6% or the Bureau of Labor Statistics CPI at at three. Those are higher um than the Fed the Federal Reserve wants to see them and they are, you know, they are price increases. They're real. If you're feeling pinched, it's it's likely for good reason because prices are continuing to increase. The idea that prices are going to decrease, which which is how how you hear it talked about generally in the media, that is extremely unlikely to happen outside of

[54:31] a recession, okay? To see actual price deflation, lowering of prices. Probably not going to see that. Hopefully, what we will see going forward is a significant reduction in the inflation rate. hopefully down under 2% maybe in the 0ero to 1% range. That's to my mind um the the ideal um rate. And the reason I say that is because to actually see a deflation rate

[55:07] is not good for most of us, especially for example if you have a home mortgage because what that means is you're paying you're paying you're how you're paying back your mortgage becomes more costly. So, the value of the dollar is dropping and and in essence, you're having to pay uh what amounts to more dollars to pay that you're you're paying that loan off with dollars that are uh um uh more expensive than they were before. That's

[55:42] that's that's why generally speaking, the Fed tries to avoid deflation because it makes paying back debts more expensive. Okay. But it would be great to see an inflation rate in the 0ero to 1% range, which would be, you know, kind of essentially, you know, no increases or only tiny increases. That way, wages have an opportunity to catch up and move beyond price increases and and therefore we can gain some ground in terms of what

[56:17] it costs us to live. Okay, so that that's number two. And number three, uh, be skeptical about the reporting you hear in terms of, uh, economics and and data and prices, all of that. Anytime you're hearing a sound bite about it, there's always data underlying that. And most economic data today can be manipulated to fit whatever perspective the person talking

[56:52] about it wants to give it. And so, you know, if you're hearing if if you're listening to someone whose perspective you generally agree with uh and and they give you an, you know, an economic perspective, that's that's what you want to hear. be skeptical of that because the the truth may be I don't want to say that they're lying but but how you would view the data might be different than how this person reporting it views it uh and and even though you agree with you

[57:29] generally agree with them. Okay. So you just have to be really careful about how you absorb data on the economy so that you can make sound decisions for you and your family. All right. So I thank you very much for joining me with at this uh this month's economic echoes. Last one for 2025. Uh let's see. Tomorrow at 5:00 pm is my 5:00 pm uh Pacific time is my show Jiggers's Place. We'll have we'll sit back and have a cocktail and a schmooz. And then of course next week I will be

[58:04] back for the full uh regular regular slate of shows. So I thank you very much for joining me. I wish you a wonderful rest of the day. Signing off. Marie darling, you are my bell.