00:00When we looked at the earning transcripts from this third quarter and where so far the earnings have been surprisingly positive.
00:08In fact, it was like the best quarter ever.
00:10So we use AI to extract some of the themes.
00:14And we did find that one of the dominant themes is that there are other stuff happening outside the trade policy that's helping offset a lot of this tariff bill.
00:24So but focus. I don't mean to cut you off, but I just want to highlight how important what you just said is.
00:30And the way to think about it is that trade is about 15 percent of the economy and the economy's the rest of it's like 85 percent of the economy.
00:40And so you could do a lot of stuff in trade that has effects on the trade space that is completely overwhelmed by the 85 percent.
00:48And 85 percent of the economy is getting this massive productivity change.
00:54And it'd be hard for, you know, a large change to 85 percent to not overwhelm something you did to the 15 percent.
01:02Yeah. At the same time, 66 percent of the economy is labor share.
01:06And a lot of academic studies are also looking into whether AI is already causing low hiring rate among young graduates.
01:16Whoever is graduating from college this year is probably in for a bad deal.
01:22So so I think there is a puzzle out there, which is if you have GDP growing at three or four percent.
01:30At the same time, you have a lot of jobs, a sense of job insecurity in this labor market and the labor market is lagging this these other, you know, the GDP growth indicators.
01:41And and the question is, can this GDP growth be sustained at this three or four percent while the labor market is so I mean, I mean, going sideways, basically with labor share probably going down, probably because of productivity gains.
02:05It could be that. Also, don't forget that there's been a big reduction in illegal immigration and employment from that aspect.
02:14And so the population growth is pretty low compared to what it was when we had tens of millions of people crossing the border.
02:22And so the break even jobs number for the payroll survey is people think is down like quite a bit to maybe around 40 or 50.
02:31Yeah, between 30 to 60.
02:32Well, I was 40, 50, you were 30, 60. I think we kind of were about the same range, right?
02:38And so so that's like another thing that that we could have big increases in productivity and big increases in output and a healthy labor market with job numbers like the one that you forecasted.
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