0:02 Who are you? And where are you going? What do you want? [Music] 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, building wealth, the whole financial and economic side of our lives. So, today is our monthly economic echoes where I talk
0:39 about the most recent economic data. Now, if you listen to other business podcasts, um a as I do, whether it's it's it's Bloomberg or it's the Wall Street Journal or Baronss, um you know, at least some of what I'm going going to talk about won't be news because, you know, they have been on top of especially the uh the inflation data um in anticipation of the meeting that's happening. today of the Fed Open Market Committee
1:16 to decide uh you know ostensibly if there's going to be a cut in the federal funds rate and if so how much. Uh, nonetheless, I it what's what what I find interesting about the uh conventional business press or the legacy business press or whatever you want to call it is they're mer focused on the macro picture i.e. what impact will interest rates have on the larger economy? What impact will tariffs have
1:53 on the larger economy? Rarely do they drill down to how it's going to affect us as individuals, how it's going to affect those of us who have a family. And and so that's really the intent here is is to start digging into those issues because here here's the reality. While having a more robust economy does in general help out everyone, the fact of the matter is if if we if an an
2:29 individual doesn't have a job, he's in a depression. I don't mean an emotional depression necessarily, but an economic depression, right? He has no income. uh and and if he has a job then the quality of that job will largely or if he or if someone has a business how well that business is running will largely determine how they experience the economy. So for someone in this country who's who's making, let's say, over a half a million
3:05 dollars, so it's not that inflation doesn't affect them, but it really probably only affects them at the margins. So they can still afford to buy the food that they want to buy. They can buy the pardon me, the clothes that they want to buy. So it doesn't affect someone at that income level even typically even if they have a family because somebody's making a half a million dollars a year is is within probably the top three four 5% of of income earners in the United States.
3:40 uh but so how all inflation for example affects a person in that income range is much different from someone who makes let's say $45,000 a year. Now that again and even that is a generalized statement because someone who makes $45,000 a year but lives a very modest lifestyle inflation may not affect them either. Uh so how we establish our individual economic lives
4:16 very much determines how outside economic factors influence us. And so that's why I go through this data each month because we need to make decisions about how we're going to handle our finances and we we those decisions should be made with a proper amount of information so that we can make the best decisions possible. Okay. So with with that is oh two more things I want to say. First of all, uh I should have started the show with this. Happy Constitution Day. So
4:53 the uh the US Constitution was uh I believe ratified on September 17th of uh what was it? Um 1789 I believe it is. So that would make it uh what 236 years ago roughly. So, if you're not flying your American flag, today is a day when the American flag is flown. Um, it it it isn't flown at half staff. That was just for one day for uh for Charlie Kirk last week. Uh, and so I I encourage
5:28 you to put your flag out. Uh, and and then the uh the other thing I want to mention is, and now I've gone up on it. Okay. Well, may and maybe it'll come back to me. Um, but in any event, let's go ahead and dig into the data and start breaking it down. And and as we always do, we're going to start with the consumer price index, the CPI. And you can see here that the uh the CPI in August it's the data is always of course
6:04 reported for the month that uh end ended uh for all urban consumers rose 4% seasonally adjusted or 2.9% over the the uh preceding year. I realize I need to expand this for you. Okay, there you go. So now you can see the chart. So went up4% in August uh and 2.9% that's slightly higher uh than than last month. Uh still not you know particularly high although
6:39 if if it were con to continue at a point 4% monthly rate then you know we could very quickly be we could very quickly see an an inflation environment of you know 5% inflation. uh significantly higher than the Fed target rate of of 2%. Um and and just to put this in perspective, it's generally thought to be the case that very moderate inflation is best for the economy as opposed to deflation or higher inflation. So that's
7:17 why the Fed targets the 0 2% rate. Okay. And then of course from our in from an investment perspective you know in order for us to make a return on an investment our return has to be higher than the rate of inflation because if inflation is 2% a year the the value of our savings is dropping by 2% a year. So we have to be making a return of at least 2% a year in order just to maintain the value of our savings. Hopefully, it'll be higher than that. 3% 4%. So, at least we're make we're gaining some ground.
7:52 Okay. Uh all all um all items less food and energy went up 3.1%. Again, this is I think just slightly up from last month. Um food went up 3.2%. You can see energy barely budged at 0.2%. Right. energy has been uh one of the bright spots in in terms of uh in terms of inflation. So let's let's drill down now. Oops. Let's take a look at food. So food at home went up 2.7%. Food away from home went up 3.9% continuing a trend that food away from
8:29 home is rising at a half at a faster pace than food eaten at home. And if you follow any sort of e you know um um finances advisors uh a lot of them will tell you one of the best ways to save money and to so that you can make investments is to eat at home. So I will tell you that rarely do I eat out. It's an expensive uh proposition especially if you keep kosher like I do. Okay. So food at home um as has been the case for
9:04 a long time now uh proteins, meat, poultry, fish and eggs went up uh you know went up at a ve you know s significantly higher rate than other foods 5.6%. Um followed by non-alcoholic beverages which went up 4.6% 6% presumably that's things like soda pop and energy drinks and those kind of things you know um uh while um you know we have to have protein um you know the these are expendable and and if you if like me you don't drink soda pop and energy drinks
9:40 and such right so and if you don't eat a lot of uh meat and poultry uh so you know you're experience food you're experiencing food inflation at a lower rate. And indeed, if you're feeling pinched because of the cost of food, you know, one op one option is, you know, first of all to give up uh, you know, non-alcoholic beverages. Uh, you know, drink drink water and and uh and drink alcoholic beverages, right? I drink wine, spirits um and and switch
10:15 from animal-based proteins to vegetable pa based proteins. So, fruits and vegetables went up only 1.9%. So, things like beans, lentils are are good sources of protein. Uh, dairy and related products went up only 1.3%. So, cottage cheese, I've heard, has become a very popular food. I've always liked cottage cheese. I put hot sauce on it. I know that sounds a little strange but it's you know it's a again dairy products are also good sources of protein and the rate at
10:53 which their prices are increasing are much lower than others. Uh cereals and and bakery goods went up only 1.1%. Right? So, not that you can replace cereals and bakery goods for proteins, but if you're if you're eating, you know, high-fiber cereals and bakery products. So, uh you know, that that that's that's a good way to um to focus your diet. Um and it'll be less expensive. And then all all all other foods at home went up a percent and a half. So you can really see that
11:28 inflation for foods at home is really being driven by animal proteins and non alcoholic beverages. Okay. So now let's look at energy. And again continuing a months and monthsl long trend. Energy commodities are down over 6% while energy services are up almost 8%. Okay. Uh and so what we're seeing is energy commodities essentially offsetting energy services. Okay. So, uh fuel oil went down just a half a percent. Okay. And now as we that
12:04 that's I think largely because we're still in the summer. It's still fairly warm across the country. As we head into fall and winter, we're likely to see fuel oil prices rise as people start heating their homes. Gasoline, on the other hand, dropped 6 6%. Okay. And this is good news. Although it's typical for gasoline prices to drop as the summer ends. People go back to school. People aren't traveling as much. So, not too surprising. Um doesn't seem to be a lot of lot going on in the oil sector
12:39 that might cause gasol gasoline prices to rise. So, you know, that's the good news on the energy services side. So, electricity up over 6%, this is again a monthsl long trend, and natural gas up almost 14%. Again, a monthsl long trend. So, you know, if you have an allect electric home, excuse me, you're experiencing inflation at a lower rate than you do if you have a home that that is partially uh gas powered. So, my house, I I have a
13:16 a gas cooktop, but an electric oven. I have a gas water heater, and I have uh a gas um uh gas heating, right? So, in theory, uh, it's more expensive to, you know, to for me to run my home, but in reality, I find my my natural gas bill is typically around $20 a month. Maybe, you know, electricity would be for the same ser, you know, for the same uses would only be 10 or $15 a month. But again, the fact that natural gas is going up so
13:53 quickly, you know, unless you live in a very cold region where you have to heat your house in the wintertime, you know, for those of us who live in a pretty warm climate like Southern California, the cost of natural gas going up, you know, it may only add a couple of dollars to our, you know, monthly uh natural gas bill. And so that may not be a particularly um you know ownorous uh situation. Okay. And then all other items less food and energy. So commodities went up by only
14:30 one and a half% services went up by 3.6%. So looking at the commodities you can see the two big gainers are used cars and trucks. So, you know, if you didn't buy a used car or truck last month, you didn't experience inflation at as high a rate. And if you don't smoke or use other tobacco products, which went up over 6%, again, you're experiencing inflation at a lower rate. Even if you bought a new car, new car prices went up only.7%. Right? Apparel barely budged, medical care was zero, and alcoh even even
15:07 alcoholic beverages went up less than 2%. Right? So you can see it was a couple of big ticket items that were driving um that were driving the increase in the commodity side of prices less food and energy. You'll note by the way that uh um things that would cons that we would think would be con um affected by tariffs apparel a lot of which comes from overseas even though it may be u made by American companies it's sewn
15:42 overseas China in particular Vietnam Turkey uh and new vehicles um you know whatever impact the tariffs are having it looks like they're for now at least they're being absorbed by the companies rather than passing them along. Even with alcoholic beverages, again, a lot of at least some of which comes from overseas, uh whether it's wine from Italy, Spain, France, uh or scotch whiskey, pardon me. Um the impact of tariffs uh right now seems to be fairly muted. Now,
16:20 if you've been following the news, so um you you you've heard that uh a court declared the tariffs, the imposition of the tariffs under the justification that President Trump used was illegal. That of course is not the end of the case. Um you know, that's being appealed. It will almost for sure go to the Supreme Court for some kind of adjudication. Having said that, I've listened to a number of commentators on this uh issue and even if the president's current justification for
16:56 the tariffs uh is held by the Supreme Supreme Court to be illegal, there are other laws under which the president can impose tariffs. And I I would say it's likely that the administration is reviewing those options now so that if they lose at the Supreme Court level, they can immediately pivot to using these other laws. So, uh, I I don't think we're going to see a roller coaster economically because of tariffs where, you know, they go up, um,
17:33 but, you know, but then this they're declared illegal and so then they they all go away, but then they go up again. I I think we're going to see in terms of the level at which tariffs are set and how they're dealt with by governments and companies, it's probably going to stay fairly consistent here on out. The issue is you the legal wrangling that's going on and all of that uh will will happen somewhat behind the scenes. Okay. Uh it doesn't appear, by the way, that the administration is going to go to
18:08 Congress to get congressional authority for the tariffs. I would imagine that there's a concern that there isn't enough support in Congress for that. Uh however, after the midterm elections, depending on on how those play out, if uh Republicans gain more seats and and more uh more congressmen who uh you know who want who want to follow the economic agenda being set by the Trump administration. So then at that point perhaps we'll see the administration seeking actual congressional authority
18:44 for the tariffs regime regime that they're that they're working on and then at that point we'll we'll have a very good sense of how all this is going to play out. I think volat volatility at that point well volatility is always an issue but not the kind of uh you know higher volatility that we saw the first part of this year. Uh so okay so that is the that is the inflation picture. Okay. Next let's look at pardon me uh let's look at
19:20 uh uh current uh real uh earnings uh for employees on non on private non-farm payrolls. Okay. So um for August, okay, the real average hourly earnings went down by a penny. Okay, so uh you know a dimminimous uh results. Um the real average weekly earnings uh went down by um about a dollar 50 A$140$150
19:55 right in that range. Okay, again they they they both went down by a tenth of 1%. Okay, now I don't want to say that's absolutely meaningless, but it is it is pretty pretty pretty pretty pretty pretty much unchanged. And you can see that for for the last three months, uh real average hourly earnings and real average weekly earnings have been around the same level. They've been pretty flat now. and and and what that means is essentially people are essentially keeping pace with
20:31 inflation but the you know they're not gaining any ground. Okay. Now uh average weekly uh um average weekly hours worked here we go wait here we go um they've been consistent at 34.2 hours. Okay. So that hasn't changed. So that the the minor changes in earnings are really due to how to the to the hourly or weekly salaries that people are getting or even the monthly salaries and how that's being impacted by uh
21:06 inflation. So you can see that um average weekly earnings okay went up uh.3% okay but and the reason that average weekly earnings went up 3% but real average weekly earnings went down a tenth of a percent is average weekly earnings are you know are not just adjusted for inflation. So it's really these top numbers that we want to look at because uh those are the inflationadjusted numbers. Now again
21:41 having said that how we each individually uh uh experience inflation that will have an impact as to whether we feel that we're we're gaining ground or not. But I think overall I I I doubt that too many people are feeling like wow I'm I'm really gaining ground unless you got a pretty significant you know increase in in in salary. Okay. So uh that is that is the earnings picture. Okay. Next, let's look at
22:18 the uh the civilian unemployment rate. Okay. All right. So, we can see that the unemployment rate in August ticked up a tenth of a percent from June. And and if again if you've been listening to the the mainstream business press, there's been a lot of discussion about weakness in employment that really has to do more with the adjustments that are made to the employment figures. So uh the the the number of jobs uh created in the
22:54 past 12 months was reduced by almost a million. Um while it's it's typical for the jobs figures to get adjusted um because of the different data sources that the Bureau of Labor Statistics use a downward adjustment of a million jobs is pretty is is significant. Okay. And so as the Fed is meeting today presumably that's going to be one of the issues that's discussed. Having said that, um what we've seen since say
23:31 August of 2023 is the unemployment rate going up from 3.7% to 4.3% so 610 of a percent and from last year to this year it was 4.2% August of last year 4.3% now. So year-over-year really the employ unemployment rate has not changed significantly. the overall unemployment rate. Okay. Now, let's compare that to to uh to men 20 years and over. Okay. Their unemployment rate went up also a tenth of a percent to 4.1%
24:07 and that compares to 3.9% a year ago and that compares to 3.6% two years ago. Okay? So there's there's no doubt that over the past two years unemployment has gone up around a half a percent. But in the last year uh it really hasn't you know changed a a whole lot. Okay so that's for men. Now for women okay the unemployment rate in August was at 3.8% also up a tenth of a percent from July from a year ago. Okay. uh
24:45 3.7%. So it actually went uh up a tenth of a percent from a year ago and from two years ago it went up you know 4/10en of a percent. So employment among women has stayed more consistent. Now again, we always have to set this against the labor force participation rates, but again, we're seeing about a half a percent higher inflation over two years ago and just a dimminimous uh amount of higher inflation over a year ago. And then looking at teenagers, okay, so uh
25:21 unemployment among teens is at 13.9% in August. That's down from 15.2% 2% in July. Uh not sure why that is. I suspect it's because of teens leaving the workforce to go back to school. Okay. So, it's not that there were a whole bunch of teens employed. It's probably much more likely that a lot of that that a lot of teenagers left the job market and that's what caused the unemployment rate to decline. And that's always the question. Why does the unemployment rate
25:57 go up or down? There's two things that drive it uh that drive the unemployment rate. One is people finding or losing jobs. The other is people entering or leaving the workforce. Both of those can affect the unemployment rate. Okay. So among white Americans, so unemployment in August 3.7% that is uh unchanged from July. Um looking back to last year, it's basically on par with last year. And looking at a year ago, it's it's up about 310en of a percent. Okay, that's
26:34 among white Americans. Among black Americans, so um unemployment is at 7 and a half% in August. Um that's up by from 7.2% in July. And you can see there's been a big increase in unemployment among black Americans. 6.1% a year ago versus 7.5% now. Okay, big big change. Two years ago it was at 5.3%. So we're seeing over a 2% increase in unemployment. Again, I I can't say that
27:10 yet until we look at the next slide on employ on on labor force participation, whether that's due to more black Americans coming into the workforce or more of them losing jobs. So, so, so stay tuned for that. Okay. Asian-Americans, what do I need to take out here? Okay, here we go. Okay. Asian-Americans unemployment rate in August 3.6%. 6% that's uh down uh slightly from well no down.3% from July. Okay. In terms of
27:46 last year, it's also down from 4.1%. So, uh Asian-Americans over year-over-year are doing better. However, it's still about a half a percent higher. Actually, it's almost a full percent higher. No, right. Half a percent higher. Sorry. Half a percent higher than it was two years ago. So that that seems to be the trend. And then finally for uh Hispanics, so the unemployment rate in August 5.3% up uh from 5% in July and from from last
28:22 year about even and from two years ago, you know, up up about what 4.4% 5%. Okay. So pretty much across the board, we're seeing a half a percent higher unemployment rate from 2 years ago. Okay? Uh except among black Americans where it's considerably higher, over 2% higher than two years ago. Okay? So is it because uh people have lost jobs or is it because people are leaving the
28:58 um leaving the the labor force? Okay. And let's here we go. We let's see from August from July to August labor force participation went up a tenth of a percent. Okay. However, let's see. So, and then year-over-year, okay, labor force participation is down. Okay, so it was 62.7% a year ago. It's at 62.3%. So, it's down about4% now from 2 years ago.
29:34 Okay, it was at 62.8% and it's at 62.3. So, one could and and this is borne out by something I heard this morning that in the last year or two there hasn't been a lot of firings, but there hasn't been a lot of hirings, especially the last year or so. It looks like most of the decline most of the well uh I'm sorry, let me let me uh let me start over again so I'm not confusing you. Okay. So,
30:09 labor force participation is down by a half a percent. So, if labor force participation declines, the unemployment rate should decline as well. So, it's down uh a half a percent from uh 2 years ago, 62.8 to 62.3. That should indicate that in fact the unemployment rate should be lower now than two years ago because fewer pe because people have left the job market. So there's fewer people searching for jobs. Nonetheless, unemployment is up by a half a percent.
30:46 So despite what what what I heard this morning from uh one of the pundits to whom I listened that there hasn't been a lot of hiring and firing uh indeed uh employment has declined by about a percent overall um half a percent due to people leaving the workforce and another half a percent higher um amount a number of people not having jobs. Okay. So the jobs picture is is weakening for sure. This is what has been discussed in the
31:21 press in the business press for the last uh month for sure month or two. Okay. And and this is why people are expecting the Fed to drop interest rates by at least a quarter of a percent perhaps a half a percent. Okay. Looking at men 20 and over labor force participation rate 70.4% 4% up from 70%. So it went up a half a percent. It's uh pretty much on par I think with two years ago and it's pretty and it's on par with I'm sorry it's pretty much on par with two years ago and a year ago. Okay. So not a big
31:58 change in the labor force participation rate among men. And I think that's pretty much the so for women labor force participation rate August of this year 58.4 that compares to uh 59.1 so down 7/10en of a percent from a year ago and it's also down by um 7/10 of a percent from uh from from two no I'm sorry uh 58. Here we go. Down half a
32:34 percent from two years ago. So again, we're seeing that uh unemployment has has well has increased uh among women even as labor force participation has declined. Okay. And then for teenagers, so labor force participation uh is at 34.8% as of August, down from 35.1%. So, it did go down 3/10en of a percent. That Oops. Wait, let's look at July. There we go. No, it just went down
33:09 2/10en of a percent from July. So, um the decline in teen unemployment would appear to be because of uh teens finding jobs. Okay. So, it's it it appears to not be from teens leaving the labor force. Um, even as of July, their labor force participation rate was 35.1%. I'm sorry, I'm sorry. Even as of June, it was 35.1. So, it hasn't changed that much June through August. Okay. Uh,
33:47 there was a steep decline starting in February through through June. Uh so you know it looks like more teens are are working okay among white Americans. So labor force participation rate 61.8 8 down 2 ten of a percent from last month and uh down let's see uh down um uh about a half a percent from a year ago and down about what uh sorry let's see here
34:25 we go so okay so down uh 7/10en of a percent from two years ago okay so labor force participation among white Americans I it It's definitely on a downward trend among black Americans. Okay. And here we have the explanation for why labor force part for why unemployment uh went up for black Americans. So in July labor force participation was 61.6%. It went up in August to 62.6%. So it went up a percent. Which is about
35:02 the rate at which unemployment increased. So it looks like the unemployment rate increase among black Americans is because more black Americans are entering the workforce. Okay. From a year ago though the labor force participation rate among black Americans a year ago was 62.7%. Now it's 62.6. So it's about flat. And from two years ago it's it's on par. So what we're seeing, by the way, is a recovery from earlier this year when labor force participation rates among
35:38 blacks dropped u pretty significantly going from February to, you know, to June basically. Okay. So, you know, there was a lot of uh turmoil in the economy in the first part of this year that caused uh people, it looks like, to leave the labor force. And now it looks like those people are coming back. Okay. Among Asian-Americans, so kind of a reverse trend. Okay. Um, Asian-Americans, their labor force participation rate in August, 65%.
36:13 Almost unchanged from July, but you can see they hit a high of 65.8% in March of this year, right? And then for a year ago, they were at 65.3 versus 65. So down slightly and from two years ago 65.5 uh again just down a half a percent. So for whatever reason uh uh white and and black Americans left the worst workforce earlier this year uh whereas Asian-Americans uh um joined it kind of
36:50 stayed in it for longer and they had a shorter downward trend in labor force participation. And then finally for uh Hispanic Americans uh labor force participation in August 67% uh up slightly from from July no July I'm sorry on par with July um and let's see from a year ago 67.8% 8%. So it is down by 8/10en of a percent from a year ago and it's roughly on par with two years ago interestingly enough. So uh
37:25 little bit of of counter uh trends among uh Asian and Hispanic Americans overall though and this is what's this is what's important is go back to the total. You can see that labor for the lab labor force participation remains below historic trends. Okay, so they haven't been you know they hit kind of the same level back in 2015 and sort of stayed there um until uh COVID. They
38:00 dropped of course significantly during COVID. They've they've recovered to almost precoid levels, but they're not recovering to the same level that they were 20 years ago. So, this is a long-term trend in reduction of labor force participation. And and we're going to see this, you can see it's among all cohorts, okay? Okay. less so among black Americans and Asian-Americans. Um and but but you know
38:37 overall um people the trend is toward people leaving the labor force. Part of that I think is due to the aging of our population. People are retiring with the intent not to work any longer. We're seeing less immigration into the country. legal immigration that is as as well as of course illegal immigration and and that too is reducing the more recently that would tend to reduce the labor force participation rate. Okay. So
39:12 what are we going to do as a society? Well to we're going to have to replace workers with automation robots uh AI. We're going to have to make each individual worker more productive. Now, for the average worker, that's a good thing because as workers get more productive, they make uh higher incomes, right? Okay. Now, let's look at employment by industry. So, uh as has been the trend now for uh quite some time for the well for the last you know
39:48 several months. Okay. highest gain in jobs is in private sector education and health services and you're going to see I suspect that this is driven primarily by health services which are a lot of which are funded by government spending okay the other big gainers leisure and hospitality that's been typical and retail trade the biggest losers are government the the trend has been that the federal government is shedding jobs even As state and local governments hire people, business and professional
40:23 services decline, wholesale trade decline, manufacturing decline, construction and mining, all these decline. Now, there has been a lot of talk about increases in jobs in manufacturing and about a big increase in d in construction of manufacturing plants. Uh I I you know I think there you know there's maybe a lot of planning going on but in terms of groundbreings that are that are creating jobs in construction completed plants that are creating jobs in manufacturing those
41:00 have not started yet. And I I had a rather heated argument with a friend of mine yesterday about this. He's absolutely cons convinced that uh manufacturing jobs and construction jobs related to the reshoring of manufacturing are are happening even as we speak. But if we look at the six-month trend, even the six-month trend shows losses in manufacturing jobs and little change in construction jobs. Okay, the 12month trend, okay, which which overlaps the Biden administration, the Trump administration does does show
41:37 construction jobs increased, but those construction job increases happened essentially uh prior to President Trump taking office and manufacturing jobs still declined almost 80,000, okay, over the previous year. So while it may be that as time goes by, we'll see these two trends change, okay, and in particular, we may see construction change. If the Fed lowers interest rates and and and then people can find that
42:14 homes are more affordable and they start they start buying homes, we might see construction pick up in the home sector. these two sectors have not seen job growth uh with the uh with the exception of construction in the kind of latter half of last year. Okay. So now let's dig down into some of these sectors. Okay. And as I mentioned health care and social assistance are really where job growth is in this sector. Private education was basically unchanged. Okay. And you can see across all sectors in health care
42:50 and social assistance um with the with the exception really of vocational rehabilitation services. So jobs are increasing. These are these are all almost all driven by state government spending. Okay. And and that's why if we go down here and and look at government, you'll see well federal government dropped jobs. So did state governments inter interestingly. But local governments increase jobs but not enough to offset federal job and state government job losses. So, uh you can see federal jobs except the postal
43:26 service dropped 11,000. The postal service uh dropped over 3,000 jobs. And then on the state level, we can see that both education um and state government excluding education declined. Okay. So, states are shedding jobs. Um, and then on the local level, so local government education increase. That shouldn't be surprising. School was was, you know, starting up and so teachers were being hired. Teachers and other people uh, you know, to who um, help run schools were
44:01 increasing. But local government excluding education also gained net 2,000 jobs. So um the reason uh government declined in this in this this past month had to do with both the federal and state governments shedding jobs. Okay. So uh all right. Um let's look now at leisure and hospital. Well actually let me go back to something here for a second. Okay. So um where um where I suspect um jobs are
44:36 increasing. So while these jobs are in private sector health and social assistance, okay, the the money for these jobs is generally speaking coming from government spending. So in essence, uh it it may be that the government is sort of outsourcing its job increases at the state level. Okay, that's something to to consider. Okay. Leisure and hospitality, both arts, entertainment, and recreation saw jobs increases 14 over 14,000. Accommodation and food over
45:11 13,000. Okay. Across all sectors now, we're seeing increases, although amusement, gambling, and recreation was the big gainer. Um, museums and historical sites actually saw a small increase. Um, that has that's kind of been reversing a trend. performing arts and uh spectator sports up a thousand. Again, um not a huge increase, but um otherwise job growth has been pretty soft in that area. Okay. Food service and drinking places saw the biggest increase in the accommodation and food services 11,000, but accommodations too
45:46 went up about 2,000. So, uh this is probably kind of a holdover from summer travel. I wouldn't expect to see uh the same kind of job gains next month. Okay. And then the other big gainer is retail trade. You can see it's kind of a mix with motor vehicle motor vehicle and parts dealers increasing, food and beverage retailers increasing, general merchandise increasing, clothing increasing, and sports sporting goods and musical instruments and stuff increasing offset by building material and garden equipment suppliers.
46:22 furniture and home furnishings declined, health and personal care retailers declined, and gasoline and fuel dealers declined. So, it's a mixed bag, but overall, um, retail trade saw 10 over 10,000 jobs increasing. On the downside, professional and business services, okay, management and of companies and enterprises essentially unchanged. Professional, scientific, and technical services lost over 3,000 jobs. and administrative and support and waste management services lost over 13,000 jobs. And it's it's not the waste
46:57 management that's decreasing, it's the administrative and support services. I uh this is I I suspect largely driven by uh the um more robust adoption of the use of AI. So I know in my own business I I don't have an assistant. My assistant is chat GPT and Claude and Perplexity. They allow me to be much more productive um than I think I would be if I had an actual person as a personal assistant. Okay. And then the
47:33 other the other big loser professional scientific and technical services. So computer system and design and related services dropped, architectural engineering services dropped. That's in line with construction dropping. scientific research and development services dropped. This could very well be to the pullback on research spending by the federal government to universities. Again, if you've been following the news, there's been hundreds of millions in some cases of billions of dollars in research funding withdrawn. There are legal fights over that. It they you know, again, like like
48:09 these other legal fights, probably going to go to the Supreme Court. So, we don't know how that's going to play out yet. On the other hand, management, scientific, and technical consulting services up. That's the only real big gainer. Advertising and PR up almost a thousand. Tax uh accounting and tax preparation up about about 700. So, you can see you can see who the three big losers, one um one gainer and that's why uh net business services are down. Okay. Uh manufacturing is also down. So durable goods manufacturing way down
48:45 non-durable goods up 7,000 right and non-durable goods so transportation equipment and manufacturing down by over 14,000 most other sectors are down the only gainers are fabricated metal products machinery manufacturing up slightly and uh electrical equipment and appliances up slightly so the the manufacturing jobs pictures not not real strong um non-durable goods manufacturing is led by food, textiles, chemical manufacturing and plastics and
49:20 rubber. Okay. Um and then other things are down textile mills, apparel, paper, uh printing etc. Now in terms of the reshoring of manufacturing, so uh you know one area for example in theory would be apparel manufacturing. So places like Vietnam where t-shirts are made, the problem is in order to bring that kind of low wage work back to the United States, there's going to have to be a tremendous amount of automation.
49:57 Uh in in order to not create a situation where the cost of those goods go up so much because of the higher labor costs that people won't buy them, right? And so here is here is sort of the uh dilemma if you wish if you wish with with respect to increasing manufacturing jobs. On the one hand, in theory, of course, they can come back, but the wage structure in the United States is so much higher than places like uh Vietnam, China, Turkey, Romania, where a lot of
50:32 American clothing is made, especially uh sort of mid-priced clothing. uh that that to bring that kind of manufacturing back to the United States is going to require a very high level of automation. Otherwise, the cost of mid-level clothing will go up quite a bit and a lot of people will not buy it or even not be able to afford to buy it. So, that's really the situation. Okay. Uh and then finally, let's look at construction. Okay. So construction of
51:08 buildings down, heavy uh and civilian engineering construction is up, specialty trade contractors is down. Okay. So both residential and non-residential construction is down. Okay. Uh belying the notion that there's been a huge increase in construction of manufacturing facilities, specialty trade contractors, residential and non-residential down. Okay. and uh heavy whoops. Um so heavy and civilian engineering construction is up. That may
51:43 be a sign that you know some of these manufacturing facilities are breaking ground or are not breaking ground but getting are imminently imminently going to be breaking ground and but more likely this is kind of infrastructure um u jobs things like uh energy facilities and such. There is a you know there is a big push on especially among large technology companies to increase data centers to increase power generation much more likely that this is in those areas as opposed to um you know
52:20 setting the stage for the construction of manufacturing facilities. Okay. So um so there you have the uh employment picture and and if you if you compare it to the 12-month picture you can see that the big changes are government employment which now is negative as opposed to positive. Um other and then you know construction was up but now it's it's down. Looking at the the one-mon picture to the sixth month picture right pretty much on trend. Okay. So what we've seen for the last
52:55 six months, the last three months, you can see it's widening as we go from six to three to one month. So these are the areas. These are the trends. We'll have to see if they change down the road. Okay. And um gosh, we're we're getting a little bit short on time here. So okay, let's look oops. Let's look real quickly at housing. Uh so median uh home price uh here in California it went up just about a 1% year-over-year. Uh median days on market
53:32 went up by 14% year-over-year. Uh number of homes sold declined 5%. Okay. And and you can see um the housing supply has was was has was been has been pretty uh flat since uh since May. Now it's starting to trend down. Okay. And and this is in California and California housing demand is also trending down. Now you can look at this you you all these links will be in the show notes. You can find these same charts for any, you know, any any
54:10 area that in which you're interested. I use California just because that's where I'm at. Okay. But you can look at at median home prices. Let's look at one real another one real quickly. We look at Omaha, Nebraska. Okay. So, Omaha, Nebraska, uh, home prices are up 4.4% year-over-year. number of homes sold down almost 11%. Median days on market up five but only 18 days. So the the um Omaha housing market is is has been you
54:45 know on a gentle upswing and in some ways is stronger than California. Okay. Um and you can see how hot is the market. It's at an 86, right? So it's a pretty hot market. Um and uh and that's due to wh people are coming to Omaha from other places. Okay. All right. So, I'm just going to look at those two markets th this this month uh so we can get on to the next which is looking at rents real quickly. There we go.
55:21 Okay. So, uh rental market trends. So, median rents in Los Angeles. Okay. Uh, zero month overmonth change, $5 year-over-year change. So, they've been pretty flat now for a year. The market is warm. Again, you can you can look at various subm markets. This is true for any rental market. And then let's go back and let's see. No, they don't have Omaha. So, let's let's find Omaha. Oops.
55:56 Okay, so Omaha, Nebraska, uh, it's gone down $65 month overmonth, but still the year-long trend is up $70. So, the Omaha market has been stronger. Um, now they're saying the market is cool. Of course, that's because of the recent decline, but the trend, I think, in in the Omaha rental market is much like the housing market. I mean the the forale housing market be uh because people are moving to Omaha which helps out the rental market as well. Okay. So
56:32 again the links will be in the show notes. You can check out whatever type of of uh whichever market you want and you can look at here's the different types of of units and uh I'm sorry the different size of units, the different types of units. So that's all available for you to explore. Okay. Finally, I want to take a look just real quickly at the uh Michigan consumer sentiments, Michigan survey of consumers. Okay, so first of all, I'm I'm going to start by looking at current economic conditions.
57:08 So the reality is um going the the uh survey of consumers as of September down slightly okay from August and and not down a whole lot from a year ago down you know a couple of points but but what's interesting is current economic conditions uh you know overall have been pretty steady. However, the index of consumer sentiment is down 21% year-over-year and the index of consumer expectations is
57:43 down over 30% yearover-year. So, what is driving this split between how people perceive their actual economic circumstances versus what they expect them to be in the future. And I will say that the drum beat of negative economic news coming from the mainstream business press has been pretty severe over the last several months. Uh now uh part of it is I think being driven by
58:21 um some of the president's actions with respect to trying to fire a fed a Fed uh Federal Reserve board member and part of it is due to um still the shaking out about what's happening with the tariffs. That's kind of on the one side, but on the other side, there seems to be a lack of recognition that in fact the economy really is not it's not experience experiencing the volatility the last few months that it was the previous the
58:56 three months before that when the when the tariffs first came in. So there's been a lot of stabilizing in the economy and as I mentioned at the beginning despite the uh uh despite the sort of legal wrangling that's going on um you know that's like unlikely to have much of an effect um in terms of changes in in economic policy. And so I think that we need to separate ourselves from what pundits are saying and look at our
59:32 own situation and you know how what what is our actual situation? What is the prospects for our continuing to be employed? What are the prospects for the success of our business? How is our spending going? Are we able to afford the things that we actually buy as opposed to looking at the consumer price index for the entire country, right? and make our uh make our e our make our assessments not only of
60:10 what's current currently happening which we we I think most of us are doing that uh pretty accurately um but make our future assessments based on what we think our real prospects are as opposed to what we're hearing in the business press. Let let's let's be honest. The point of the business press is to get people watching and listening. Okay. And so, uh, they're not going to come out and say, uh, you know, not a lot of changes, everything's fine, uh, you know, volatility has decreased, not
60:45 a big reason for you to be concerned. They're not going to say that because then you're not going to pay attention. You're not going to listen and watch. Okay? And so, there's an incentive for them to have people come on and talk about the volatility, the uncertainty, all those kinds of things. But I I encourage you to listen very closely to what the various pundits are saying because oftentimes what I find is they start out talking about the uncertainty and the volatility, but then as they get deeper into what they're saying, they
61:20 start taking back some of their earlier comments. Okay? And and in some cases, the hosts will be sort of pushing them to emphasize uncertainty and volatility. And at that point they'll actually start pushing back. And so if you are watching other uh business uh sources uh I I I I encourage you to listen with a a skeptical and attentive ear not just to the initial remarks number one. And number two really funnel your economic decisions through your own experience
61:57 because in the end that's the most relevant for you. So, I thank you very much for joining me today, especially my live viewers. Always good to know you're out there. Uh, this is my last show for this week and so we'll be I'll be back next week um with my regular uh slate of shows. So, uh again, thank you very much for joining me. Wishing you a wonderful rest of the day and week and signing off as I always do. Marie darling, you are my bell. courage and