The Indicators of this year and next

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0:43It is time for Family Feud.

0:49Hello and welcome to Planet Money. I'm Waylon Wong. Today, I am competing head to head with Planet Money hosts Kenny Malone and Jeff Guo. We have two rounds in today's show. First, what was the indicator of 2023? The thing that when we look back at the economy years from now, we will say that's what this year was all about. And second, what will be the indicator of 2024? We try to predict what will define the economy in the coming year. This is where legacy is made, Waylon. I am very excited to make my mark. Here we go. History in the making. Jeff, you ready? I'm ready for a rematch. Did you lose?

1:26I think we both lost to Sarah last year. I'm glad we didn't invite her back. Excellent. Here are the rules. Each of us prepared something for our indicator of the year. We will each make our case in 60 seconds or less. And in the end, you, the listener, will vote on who had the best indicator of 2023 and who you think has the best prediction of the indicator of 2024. Coming up on the 2023 half of the show, we've got Kenny Malone on consumer sentiment, Jeff Guo on a soft landing, and me, your indomitable host, Weyland Wong and the housing market right after the break.

2:30faster. Unleash your superhuman potential today. Learn more at superhuman.com slash podcast. That's superhuman.com slash podcast. This message comes from NPR sponsor Adobe. Introducing the all-new Adobe Acrobat Studio, now with AI-powered PDF spaces. Need to turn 100 pages of market research into five insights with a click? Templates for a sales proposal that'll close that deal, or an AI specialist to tailor the tone of your market report. You can do all that with the all-new Adobe Acrobat Studio. Learn more at adobe.com slash do that with Acrobat. Indicators of the year 2023. Jeff, you're up first.

3:17All right, all right. Who's going to set the timer? Oh, I got it. I got it right here. I've been told there's a very aggressive buzzer at the end of this, Jeff, so just be warned. Oh, no, I hate loud noises. It's going to upset at my cats. All right, all right. Hold on, hold on. It was rare. Ow. Okay, deep breath. Okay, so I would argue that the thing we will all remember 2023 for is the saga of the soft landing. Will the Fed be able to bring down inflation without triggering a recession? Or will the whole economy descend into a crisis? That was the main storyline of 2023. Kept us in suspense the whole year.

3:51Remember every month waiting for the new inflation numbers. Remember all of our debates about the Phillips curve. the yield curve, and that weird month when everyone seemed like they were an expert on the job openings and labor turnover survey. It was all so, so stressful. And I'm not just speaking as an economics reporter, but also as a regular citizen who does not want the economy to, you know, collapse. But can I say, in hindsight, I maybe kind of enjoyed it? Because the whole year kind of reminded me of, you know, a rom-com. The whole will they or won't they situation between the Fed and the soft landing.

4:21And just like a rom-com, it looks like we're gonna have that Happy ending, I think. I hope. Hopefully. Hey, Jeff! Five seconds to spare. Anything else you want to say? No, I got nothing. I can't breathe. What's the title of your rom-com? Will They or Won't They? Ooh, ooh. Just tell people what it's about. Every rom-com is about Will They or Won't They? How about A Soft Place to Land? Oh, that's good. And it's like just in time for Christmas. Will the big city, Jay Powell, make it in time? It's good. it's got hallmark hallmarks of hallmark it's good i love jeff's assumption that we were all furiously debating the phillips curve this year i feel like we had different years slightly different years well i uh i actually would not mind going next because jeff has kind of keyed me up nicely if that's okay yes absolutely no i'm not the official host waylon but i would love to say 60 seconds on the clock it's always been like a dream of mine game show style.

5:18Is that OK? You go for it. Yeah, because I want you to have this before we crush your dreams of like not choosing your indicator as the indicator of the year. All right. Well, no, the people choose the people choose, Waylon. OK, 60 seconds on the clock, please. And it's the economy stupid. That is the famous formula for why people vote the way they do. But I am here to say no. It's what people feel about the economy. And, you know, for decades, this This distinction did not matter. But 2023 produced a historic split between, frankly, surprisingly good economic numbers and surprisingly bad economic sentiment numbers.

5:59And if you look at the econ data, it does increasingly seem, as Jeff said, like we've threaded a needle and steered the economy through a pandemic and a recession and a spike in inflation to a soft landing where inflation gets wrangled without crashing into another recession. And yet our economic vibes are not reflecting this. It really seems like this disconnect will end up shaping the world in the upcoming elections, of course, but but also in the lessons our policymakers draw from the last three years. And so I nominate as my indicator of the year consumer sentiment. Thank you. I have three more seconds.

6:32I just like to thank everyone. Oh, there it is. No, boo. That is loud. Well, I think you have teed up my indicator quite nicely because as we've covered consumer sentiment, this negative consumer sentiment, I think, was largely driven by what's going on with my indicator. So if we get 60 seconds on the clock, I will commence. All right. For my indicator of 2023, I would like to direct you to America's Best Cultural Barometer, which is the most recent season of Selling Sunset. This is the Netflix reality series about luxury real estate agents in Los Angeles. Things are moving pretty slow in the market right now.

7:17This is Mary Fitzgerald, one of the agents on the show. You don't have as many buyers out there trying to buy. We don't have as many sellers willing to sell. I think every agent has to really get out there and hustle. That's right. Even the super rich are having trouble in 2023's housing market. Mortgage rates went up to 8 % this year, so aspiring buyers couldn't afford a home and existing homeowners didn't want to sell. Realtor.com says existing home sales are on track to have their worst year since 1995. So borrowing from Mary's language, I think the two of you will really have to hustle if you want to beat my indicator of the year.

7:53The lousy housing market. Well done, Waylon. It is incredibly on brand that Waylon somehow managed to get reality TV into this. I am very impressed. I just want to point out, there's something very interesting psychologically that's going on here where I would argue the 2023 was like a rom-com. Kenny, you're arguing it's basically like, I don't know, like a Greek tragedy. It's a Fincher movie. Okay, sure. It's Gone Girl. Oh. And Waylon just thinks it's one of those reality shows we all had to watch when the writer's strike happened. Yeah, you're not wrong. Well, I would have watched Selling Sunset even without the writer's strike.

8:32We know, we know.

8:37Coming up after the break, more indicators to feud over. What will define 2024? Our Planet Money Indicator Family Feud returns after this break.

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11:09All right. Now we're going to look into our crystal balls to figure out which economic forces could shape the year ahead. Same rules as before. We'll each make our case in 60 seconds or less. And in the end, you, the listener, will vote on who you think made the best case for the economic indicator of 2024. Kenny Malone, you are up first. All right. So I've got a magic eight ball here. And oh, I see. I see a person of the year Time magazine cover and a Nobel Prize speech and a host on Saturday Night Live. And they're all Jerome Powell. Yes. 2024 will be the year of Jay Powell and the Fed and interest rates.

11:50After the Fed's most recent meeting, Jay Powell said, quote, you better believe we're slashing those rates next year, suckers. He didn't say that. He would never say that. But what he did say is, quote, there's a general expectation that this will be a topic for us looking ahead. That is a bomb by Fed standards. The Fed, of course, central bank for all banks. So whatever interest rates it sets ripple through the whole banking system. And if the Fed really does start cutting next year, it's possible. We would also start to see downward pressure on rates for car loans and credit cards and mortgages.

12:20And oh, what's this? Oh, Magic 8 Ball. It's showing a ticker tape parade. Jerome Powell, he's on a float. We're celebrating the soft landing defeat of inflation. This is why interest rates will be the indicator of the year for 2024. Wow. There it is. Thank you very much. It's perfectly timed. Yeah. Just like Jerome Powell's interest rate reductions. Hopefully. I do want to stop the emails. I understand how a Magic 8-Ball actually works. You ask it a question. You can say, don't send me those emails. I understand. It's fine. You can get custom ones. You don't know that I didn't get this made as a custom 8-Ball.

12:50Of course, you would have a custom 8-Ball of all people. I would love a custom Magic 8-Ball. I think, who's next? Jeff. Jeffrey Guo. Beau, you are up. All right. 60 seconds on the clock. You ready for this? Let's do this. You're on. OK, so I think that the leading economic story of 2024 will be Bidenomics. And when I say Bidenomics, which, let's be honest, is kind of a vague term, I'm really referring specifically to one kind of radical idea that the president has really embraced. We've talked about it a lot on these shows. It's called industrial policy. And it's all about the government being, you know, hands on, promoting certain industries, supporting certain types of businesses like manufacturing and, you know, just generally being more proactive about shaping the economy.

13:33Like, you know, the CHIPS Act of 2022, which is going to spend almost 300 billion dollars toward boosting the semiconductor industry or the Inflation Reduction Act, which is going to spend like 400 billion dollars helping Americans transition to greener energy sources. Yada, yada, yada. These are big spending programs that needed a couple of years to get off the ground. And in 2024, which of course is a presidential election year, the big question will be whether Biden's big swings, his big attempts to implement industrial policy, whether we will start seeing any benefits finally show up in the economy.

14:03Woo! Jeff. Very well timed. My goodness. I think Jeff might be getting the most words per second in on this. I'm very curious. I'm very curious for people listening at like speed and a half or double speed how this is all playing. And I didn't even do high school debate, guys. Is Bidenomics an indicator? Like what? I just want to, I mean, I'm not trying to put my finger on the scale or anything, but I'm just saying when you think about indicator of the year, Jeff's just named like a proper noun. And it's like, what is that? It's like, is that a number? Is it like, whatever, no big deal. Katie, your indicator was Jerome Powell.

14:35No, no, no, it was interest rates. It was interest rates. It just happened to be framed around Jerome Powell. You know, I am very intrigued by Bidenomics. I think that's a good pick, but I think mine is better. I think mine drills down a little bit more specifically within Bidenomics and is thus the superior indicator for 2024. The clock isn't running and you're making your case. This is not fair. OK, all right, all right. OK, sorry. Let's put 60 seconds on the clock and then I will formally make my pitch. My pick for indicator of 2024 is junk fees. I mean, forget industrial policy around semiconductors or green technology.

15:08The Biden administration is going after surprise fees that get tacked onto everything from concert tickets to banking services. Right now, there are pending proposals from multiple agencies to go after junk fees. I am talking about the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Communications Commission, even the Department of Transportation. The Biden administration is getting petty. I mean that in the most literal sense, going after these small inconveniences that add up to billions of dollars in some cases. As a very petty person myself, this speaks to me.

15:40And if these proposed rules get finalized, consumers, that's you and me, could potentially see lower late fees for credit cards or fewer add-ons at car dealerships. Less junk in 2024. That is my pitch. Waylon Wong for 2024. I feel like that's her pitch, America. Much, I was going to say, much like all of these agencies, Waylon is making a populist pitch here. I know how to play to the crowd. It's like running for high school class president. I'm fine. I'm not, I don't feel threatened by this. It's okay. Are you just saying that, Kenny, because you don't have a slogan of your own? I'm saying I've given people mental images of Jerome Powell on magazine covers and on parade floats.

16:17And if that's not enough, then I will put my microphone down forever. That's not a promise. I can't do that. I can't afford to do that. And that's where you, the audience, comes in. Email us with your votes for the indicators of last year and next year at indicator at npr.org and put family feud in the subject line. The choice is yours. Holes close on Sunday, December 31st, and we will announce the winners on the Indicators January 5th episode. Wait, do we get a prize for this? You get to be not a loser, I think is it. That's it. The psychic thrill. I feel like it's off-brand for us not to have a monetary incentive, I'm just going to say out loud, to the powers that be.

16:59Coming up on Planet Money, it's the rest of the story, where we check in for updates from some of the most memorable people we've had on the show, like the data detective seeking to uncover the truth in academic research, or the Hollywood strike captain trying to pull off one last job. Listen for all that and more next week on Planet Money. Today's episode was produced by Julia Ritchie and Willa Rubin. It was engineered by Valentina Rodriguez-Sanchez. Fact-checking by Sierra Juarez. Kicking Cannon edits the indicator, and Alex Goldmark is Planet Money's executive producer. I'm Waylon Wong. This is NPR.

17:33Thanks Thanks for listening.

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