The Ghost Recession: A Brief Economic History of Now

The economic pain that Americans experienced in 2022-23 was dubbed the “vibesession,” suggesting that negative public sentiment was out of sync with a healthy economy. But what we were truly experiencing was more like a “ghost recession.” As the Fed squeezed the economy by raising interest rates from zero to above 5% to get inflation under control, only the extraordinary circumstances of the post-pandemic economy kept unemployment low and the economy growing. But if we had a ghost recession, that also means that the nascent 2024 “ghost recovery” screeched to a halt with the radical changes to economic policy this year. Also in this episode: What it means that 911,000 fewer jobs were created from spring 2024-2025, and many metaphor try-outs. Revenge of the Vibecession | The New Yorker https://www.newyorker.com/news/fault-lines/revenge-of-the-vibecessionBirth-Death Model FAQ https://www.bls.gov/web/empsit/cesbdqa.htm THE THIN END OF THE WEDGE definition in American English | Collins English Dictionary https://www.collinsdictionary.com/us/dictionary/english/the-thin-end-of-the-wedge Economists’ models of inflation are letting them down https://www.economist.com/special-report/2019/10/10/economists-models-of-inflation-are-letting-them-down [The Economist 2019]

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 0:31Robin Rauzi?

  Okay, are we ready?

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• 0:37Robin Rauzi?

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  Ben, give me one damn second.

• 0:51Speaker 03

  Hello and welcome to Optimist Economy. I'm Catherine.

• 0:54Robin Rauzi?

  I'm Robin.

• 0:55Speaker 03

  On this show, we believe the US economy can be better, and we talk about how to get there, one problem and solution at a time.

• 1:08Robin Rauzi?

  At the top of our show, we like to make a few announcements. First, I want to say that as of today, we have 517 ratings on Apple Podcasts, which puts us extremely close to that 1% goal that we're after. Also, I want to say about 25 people have joined Optimist Economy as spiritual sponsors this season. We're so grateful for all of you. This week in particular, to Christie Barnes in Chapel Hill, North Carolina, and Tim S. in Silver Spring, Maryland. And he says, "Thanks for helping me stay practically optimistic at a time when it's very hard."

• 1:38Speaker 03

  It's real hard. It's hard for us, too. We had some great contributions to my executive order of things you're not allowed to say to a pregnant woman, that I just want to read here at the top, including, "Any day now, when, in fact, you're three months out, are you sure you aren't having twins?" So that person belongs in jail. I don't know, I mean, there's just, I don't know, forget my executive order, that person belongs in real jail. And your life is never going to be the same.

• 2:09Robin Rauzi?

  Thanks. Thanks for that.

• 2:10Speaker 03

  Thank you for that. I will say that I was just in New York and I had a wonderful treatment as a massively pregnant woman going through New York and have to shout out in particular, the woman, I was standing on a metro train, or they say subway, I don't want to get canceled. I was standing in a subway car, kind of during rush hour, and a woman saw me and she walked over, got me, brought me over to where she was, where she found an open seat and made room and had me sit down. And then she didn't speak to me, she didn't look at me, she never acknowledged me, she didn't say anything to me. And I was like, you are my personal hero.

• 2:50Robin Rauzi?

  She's just like a ballet.

• 2:51Speaker 03

  Robin and I have said so often, don't talk to us. This woman said nothing, just brought me to a seat for a really long subway ride. And I was like, we need another half of this executive order. She understood the assignment. Those are the announcements. Some people are nice to pregnant people, but they just don't get subject to our fake laws. We also have, our next segment is-

• 3:13Robin Rauzi?

  Wait, wait, wait, I forgot to say, we are still collecting audio reviews. Thank you for the people who've called in so far. You can still call and leave us a review on our voicemail. That number is 202-643-0295. I'll put that in the show notes. That sounds like a good idea. I'll do that. Now, Redcon.

• 3:34Speaker 03

  Redcon.

• 3:34Robin Rauzi?

  Which stands for retroactive continuity. And this is the segment, if you're new to this show, where we're actually reflecting on shows you maybe haven't heard.

• 3:42Speaker 03

  The Christopher Nolan part of the episode, as my friend pointed out. I had an economist reach out to tell me that when we were talking about paid family and medical leave, and I explained that in a social insurance program, on the federal or state level, you can have the worker pay the tax and/or the employer pay the tax. And in a lot of paid family and medical leave programs on the state level, only the employers pay. And he said he didn't think that that was true. And it's not, at least Rhode Island is one, but in some states, the worker and the employer both pay the paid family medical and leave social insurance

• 4:22Speaker 03

  tax. And he pointed out that he thought, he agreed with me, it needs to be a worker's side tax, because workers are in support of it, and that way they'll never take it away.

• 4:33Robin Rauzi?

  I looked up gamma power because in our conversation last week, you said, "Do I have gamma power?" And I'm here to tell you, Catherine, you do. You have gamma power. So gamma power is spikes in these high-frequency brainwaves that are in the frontal cortex of your brain. I should just say, I'm not a neuroscientist, but in kids, they tend to correlate with emerging language skills. But what I also found was interesting is that it shows alertness and focus in adults. And they're studying, sorry, some places like MIT are looking at whether you can stimulate gamma waves to combat Alzheimer's and Parkinson's and some other diseases like that. Anyway, gamma power.

• 5:15Speaker 03

  Gamma power. We all have gamma power.

• 5:17Robin Rauzi?

  We all have gamma power.

• 5:18Speaker 03

  That's a boost. I feel great about that. I have a power I didn't even know I had. I have gamma power.

• 5:23Robin Rauzi?

  Yeah. Excellent. Terms and conditions.

• 5:29Speaker 03

  Terms and conditions. Okay, I have one. Thin edge of the wedge. It's very hard for me to say thin, thin end, oh wait, no, thin end of the wedge, but also thin edge of the wedge. They both work.

• 5:43Robin Rauzi?

  Right.

• 5:44Speaker 03

  Okay, so if you say that something is the thin end of the wedge, you mean that it appears unimportant at the moment, but it's the beginning of a bigger, more harmful development. And it's always used in the negative context of like the, the, the bad thing that's lurking behind the small thing that you didn't consider.

• 6:08Robin Rauzi?

  It seems to be a Britishism, really.

• 6:10Speaker 03

  It's, yes, I think it's, it's more common in British. What's really funny about this is that this is a phrase that someone used in rejecting my book proposal.

• 6:21Robin Rauzi?

  But you used it in sort of a positive way, like?

• 6:23Speaker 03

  Used it in a positive way, kind of, but was referring to like potential book sales of like, "We don't see the thin edge of the wedge here." And I was like, wait, doesn't, I had to look it up and I was like, does that mean it's good? Or in her mind, all of you, like?

• 6:39Speaker 03

  Nascent optimists listening out there.

• 6:42Robin Rauzi?

  And not a big enough wedge.

• 6:43Speaker 03

  You're you are like the bad thing lurking in the background. I don't know. It was an interesting phrase. I think it was used maybe in like a new context now it's expressed to me. Basically that if I sold a book, I would be a harbinger of horrible things.

• 7:01Robin Rauzi?

  Economic disaster.

• 7:02Speaker 03

  Of economic disaster. I don't think that's how she meant it.

• 7:06Robin Rauzi?

  I don't think that's how she meant it.

• 7:07Speaker 03

  Yeah, yeah, it's an Enigma Montoya moment. But like her phrasing was, I don't think the book will sell. But if you just read it with the actual definition of thin edge of the wedge, it's like you are going to bring about our economic destruction. So I have been reveling in this rejection because I actually find it to be totally hilarious. And just a note for the optimist that rejections are very common. It's not, I'm not like personally offended.

• 7:35Robin Rauzi?

  Writers are used to rejection.

• 7:36Speaker 03

  Yeah.

• 7:36Robin Rauzi?

  It's just like that's the territory.

• 7:38Speaker 03

  Between being an academic, like a half academic researcher and a writer, like rejection is really most of what I know.

• 7:45Robin Rauzi?

  You know, speaking of rejection, I just saw a former colleague posted on LinkedIn that he said, when you get rejection letters, it's way better if you just try to read them in the voice of Sam Elliott. And he linked to the video of Sam Elliott at the bar in The Big Lebowski.

• 8:06Speaker 04

  A wiser fellow than myself once said, sometimes you eat the bar and watch a bud. Sometimes the bar will eat you.

• 8:19Robin Rauzi?

  So anyway, that's advice for you guys facing any sort of unemployment situation these days. My term and condition is I was looking up actually full employment, which led me to the Phillips curve, which is, was developed in 1958 by an economist named William Phillips. He was looking at British inflation and unemployment data. But it's basically this demonstration of how inflation and unemployment sort of balance each other out. When unemployment is very low, it tends to push inflation higher and the reverse is true. And there have been some sort of interesting questions about how true this is and whether or not, you know, we had this long, long period of low inflation and low unemployment. And then also, we've got some, we've had some really interesting things happening in

• 9:04Robin Rauzi?

  the unemployment and inflation space since the pandemic, some of which we're going to talk about today for our big pill crow.

• 9:11Speaker 03

  Which we can get right, too.

• 9:12Robin Rauzi?

  We're framing this a little bit as a pitch session because I normally have an economist on speed dial who I can ask questions when things are in the news. But my economist was busy this week, and so this is my chance to ask these questions because recently there was a big downward revision in the estimates of the number of jobs created going back to 2024. And I was kind of curious what to make of it because one of the things that was showing up in poll data, in news stories, and certainly in the election, was that people did not feel good about the economy in 2024. And yet, the economic data was not explaining it at the time.

• 9:54Robin Rauzi?

  And then we got this big downward jobs revision about 2024. We've talked a lot about the mechanics of the BLS, and we've talked a lot about how they do what they do. But I was just kind of curious, like, beyond all that, like, what you were making of this, maybe the vibe session was actually, it was like a real thing. It wasn't, it wasn't just vibes. People were actually sensing things that were going on out there that were not yet surfacing in the data.

• 10:19Speaker 03

  Well, my hot take is that it wasn't a vibe session. It's really easier to think about it as a ghost recession, which, believe it or not, is not a technical term, and I need to explain it. But I think I can, if we start with, like, a history of now and where our economy has been since the pandemic. Everything that we're going through now really starts

• 10:45Speaker 03

  With the pandemic and in March of 2020 and April of 2020, the US experiences its shortest and severest recession on record in that it didn't last very long, but associated with the shutdowns at the start of the pandemic, the US economy shed about 22 and a half million jobs in less than five weeks.

• 11:08Robin Rauzi?

  Mm hmm.

• 11:09Speaker 03

  We will never come close to doing that again, short of another pandemic. The unemployment rate shot up to around 20%. There were some measurement issues with the unemployment rate at the time. The official unemployment rate was 14 and a half percent, but the BLS released a note saying it's 19 and a half. These people are not classified correctly, given how special the pandemic was and how the survey couldn't capture it. So that puts us into the summer of 2020, when the US economy is the worst it has ever been since the Great Depression. And the open question becomes, are we ever going to get out of this? Because the precedent that we were coming from with the last recession we had had was

• 11:53Speaker 03

  the 2007 to 2009 financial crisis. And the worry at the time was if we had another slow labor recovery like the Great Recession, you were looking at like 15 years to recover from this two-month pandemic job loss. So that didn't happen, thank God. Congress and the Federal Reserve juiced the market really as much as they could. We got stimulus checks. We helped unemployed people with extra benefits. We kept people in houses. We put student loans into automatic forbearance. You could go penalty free into a mortgage forbearance. I mean, we basically did more than we have ever done.

• 12:28Robin Rauzi?

  We pulled out all the stops.

• 12:29Speaker 03

  All the stops, pulled out every stop possible to try and keep the economy from sliding into disaster and keep people preserved through this difficult time. And the result was amazing. The US economy recovered all of those jobs lost faster than anyone could have predicted in 2020. It took about two years, which is incredible. The predictions were that it would take five or that it would take six because it was such severe job loss and the economy was still opening up. And in that period of especially 2021, I mean, that was the fastest job growth the US had ever seen. So because the hole was so big. A big problem emerges towards the end of 2021,

• 13:14Speaker 03

  which is that we're starting to get hot prints on inflation.

• 13:18Robin Rauzi?

  I'm sorry, did you say hot prints?

• 13:20Speaker 03

  Hot prints. That means the print is what we call the inflation report. And if it's hot, that means the number is high.

• 13:27Speaker 03

  So it's a hot print. So inflation refers to the year-over-year growth in average prices. The Fed wants it around 2% and in the fall of 21, it just keeps ticking up. The obvious response to inflation rising is that you're supposed to increase interest rates. The Fed was waiting to do that because the labor market was still recovering from the pandemic. And they didn't, like, and this recovery was, it was amazing. It was like hot job summer.

• 13:51Robin Rauzi?

  But it was fast.

• 13:52Speaker 03

  And it was fast. There are big questions about when should we pump the brakes? Because we wanted to stabilize the labor market, but the inflation reports kept getting higher. So eventually, they turned on the brakes, which means to raise interest rates.

• 14:07Robin Rauzi?

  And by there, we mean the Federal Reserve raised.

• 14:09Speaker 03

  The Federal Reserve raised interest rates and for over two years, the interest rate had been zero.

• 14:15Robin Rauzi?

  Yeah.

• 14:16Speaker 03

  Meaning that most interest rates in the economy were at massive lows. And then they basically raised it for a year and a half. Every time they met, they raised interest rates again. And it was always a question if they were going to go up a quarter of a point or a half a point and raise interest rates in the economy to combat inflation. This notion of a vibe session coincides almost perfectly with interest rates going up.

• 14:38Robin Rauzi?

  Interesting.

• 14:39Speaker 03

  So it's like vibe session is a thing. I think the first appearance is in the summer of 2022, when interest rates by this point have been raised two times or three times. And it kind of, as long as the Fed is moving interest rates up, we are in a quote unquote vibe session. And I always thought at the time, it was reflecting. A couple of things, but first finish the story. So we raise interest rates from basically the start, the spring of 22 through the fall of 23. Interest rates are just on this very steep climb up. They get to where they are.

• 15:19Robin Rauzi?

  The climb is from zero. We should.

• 15:20Speaker 03

  The climb is from zero. It goes from zero to five and a half. This is a big jump.

• 15:24Robin Rauzi?

  And interest rates had been so low even before the pandemic for so long.

• 15:27Speaker 03

  They were in like a lower era.

• 15:29Robin Rauzi?

  Yeah.

• 15:30Speaker 03

  After the Great Recession, they lowered them.

• 15:32Robin Rauzi?

  And they never kind of got out of that.

• 15:34Speaker 03

  I mean, they wanted to raise interest rates, but like, man, you still hadn't recovered the jobs from five years prior that were lost. Like they just, it was a very tenuous time for the labor market. For the record, the US labor market didn't really come out swinging from the Great Recession until almost like 2017 or 2018.

• 15:50Robin Rauzi?

  Yeah.

• 15:50Speaker 03

  I mean, it just took a really long time to not just recover, but become stronger. So interest rates stay high through 2024, but they don't raise again. And this is when you start to hear less from the vibe session. We're not great, but it's kind of leveled out with interest rates in tandem. And then in the fall of 24, we see weakness in the labor market. Price growth has fallen below 3%. They feel comfortable and they start to lower interest rates and they are on a path of, I think, three or four successive rate cuts. And then Trump becomes president.

• 16:23Robin Rauzi?

  Mm hmm.

• 16:24Speaker 03

  And he says, I'm going to have broad tariffs, trade wars for no reason. I'm going to deport people and I'm going to cut the federal government and the federal reserve completely freezes. And they're like, well, we can't do anything because you're basically proposing a policy of stagflation.

• 16:40Robin Rauzi?

  Yeah.

• 16:40Speaker 03

  And that is where we have been this year is waiting for the Fed to act in either direction, either to go back up to answer prices or to go back down to answer the hurt in the labor market. So that's, that's like the brief history of now. I think your question was, what was it like days ago? I don't remember.

• 17:02Robin Rauzi?

  Your question was, yeah, I just wanted to know what you made of this about like looking back with the benefit of this hindsight, essentially. What do you make of this big downward revision?

• 17:15Speaker 03

  Okay, so this will make me sound borderline insensitive, but I never thought the vibe session was that interesting.

• 17:24Speaker 03

  It was less a vibe session and more a ghost recession.

• 17:29Speaker 03

  You know that I struggle with metaphors, so like, stay with me. There was so much talked about and like, it was like, we're in a vibe session. And I had my, my phone was constantly ringing with reporters, economics journalists, like, asking me about the vibe session. And I was like, am I missing, I mean, like, am I missing something? The Federal Reserve is actively restricting the economy through the raising of interest rates, and prices are high. Like, what is the, of course, it's shitty out.

• 18:00Speaker 03

  What do you expect?

• 18:01Robin Rauzi?

  It's deliberate shit.

• 18:02Speaker 03

  They're trying to hurt the economy in order to bring down prices. And they're like, what do you think of this vibe session? I'm like, I don't, I'm sorry, but why? Like, it was, to me, it felt like it was almost like, it was almost like quiet quitting, or like a trend term. That got attention because it was an interesting way to frame stories. But it did not seem to me to have much substance behind it, because it had a very clear, like, logical and causal link. The Fed is hurting the economy by raising interest rates, and inflation is hurting the economy by making things more expensive. So people were pretty upset in the consumer sentiment survey, and they were not happy with the economy. And people were like, it's a vibe session.

• 18:45Speaker 03

  I'm like, it's just economic pain.

• 18:48Robin Rauzi?

  Well, that's interesting, though, because, you know, I think people feel like economic pain is a recession, but it wasn't a recession in the economic meaning of the word.

• 18:56Speaker 03

  The part that I think was unintentionally interesting to me showed the degree to which, when people are going through a hard time in the economy, they expect it to be a recession. Well, it was almost as if it was suggesting, like, No indicator is showing anything wrong with the economy, but people aren't happy. When in fact, lots of indicators were showing lots of things wrong with the economy. It just wasn't bad enough to be a recession.

• 19:24Robin Rauzi?

  Well, they weren't necessarily wrong. They were intentional. They slowed down hiring on purpose, essentially, right?

• 19:31Speaker 03

  Yeah, I think the way that I have thought of the vibe session is less that a vibe session and more it was a ghost recession. I mean, you raise interest rates from zero percent to 5% in a year. In every economic history or case that you can point to would have said you were going to be in recession by the end of it. And that there is no way you can raise interest rates this fast, this quickly, and not trigger an unemployment crisis and go into a recession. And for basically a year and a half, we were all waiting for it.

• 20:03Robin Rauzi?

  Yeah.

• 20:04Speaker 03

  And we were waiting for this recession to come and waiting for this recession to come. And I think that the expectation of a recession was part of this conversation of that we kept on having people like me saying like, it's not a recession.

• 20:19Robin Rauzi?

  Well, what do you mean by a ghost recession?

• 20:21Speaker 03

  It's the recession that wasn't there. I mean, when we started raising rates in 22 and kept it up for a year and a half, by the fall of 2023, we should have been in a recession. Everybody was predicting it.

• 20:33Robin Rauzi?

  And so we just sort of saw it, but it wasn't really there?

• 20:36Speaker 03

  But it was, so we saw like, it was almost, maybe not even a ghost recession. You know, when you like, take a photo and there's like the negative print?

• 20:43Robin Rauzi?

  Mm hmm.

• 20:44Speaker 03

  Like, it's the negative of a recession. We didn't see it, but we saw like where it should have been.

• 20:48Robin Rauzi?

  Hmm.

• 20:49Speaker 03

  Again, this was, this metaphor, yeah, I don't know that that's, yeah, okay.

• 20:54Robin Rauzi?

  Like a ghost on an image. Like, it's something that's just sort of hinted at being there, but it's not really there.

• 20:59Speaker 03

  There's some scene where like, they're at the Fed in the darkroom developing photographs. And in one of the photographs, they can see the recession and they're like, there it is. But it, it wasn't there when we took the photo.

• 21:10Robin Rauzi?

  You took the picture?

• 21:11Speaker 03

  Yeah. The high school horror movie set in the 80s that is the Federal Reserve making decisions about the economy. I think this one works.

• 21:21Robin Rauzi?

  The Scooby Doo recession.

• 21:24Speaker 03

  The high school, the high school darkroom economy.

• 21:28Speaker 03

  But, but it should have been there and the economy did show signs of weakness throughout that period. Even though the economy didn't enter recession, we still need to recover from the weakness that wasn't recession.

• 21:41Robin Rauzi?

  But then we just crashed into a new presidential administration and a whole lot of strange new policies.

• 21:46Speaker 03

  Yeah, strange is a kind way to put it. I mean, right around the fall of 2024, we basically start to see interest rates fall. And this, had we had a real recession, this would have been the start of the real recovery. We just had kind of win- winches, weakness on the fringes, winches, damn it. Dub ya.

• 22:10Speaker 03

  Somewhere there's a group chat of my high school debate team that was like, she did it again. Added to the list that we keep on the chalkboard.

• 22:16Robin Rauzi?

  Winches.

• 22:17Speaker 03

  Winches, but the, the, I don't even remember what I was trying to say.

• 22:21Robin Rauzi?

  Weakness on the fringes.

• 22:23Speaker 03

  On the fringes of our economy. It showed up in lots of places in small ways. Like the hiring rate started to slow, but the unemployment rate was still falling.

• 22:32Robin Rauzi?

  Right.

• 22:33Speaker 03

  You know, the thing about the economy and judging its strength or weakness is, I mean, you have to look at everything.

• 22:39Robin Rauzi?

  Yeah.

• 22:40Speaker 03

  To the extent that we should have had a recession at the end of 2023 and into 2024, the recovery from that started in the fall of 24, where we started to lower interest rates, we got inflation under control, and that all came to a screeching halt. And so I think some of what we're feeling right now is the screeching halt.

• 23:00Robin Rauzi?

  Of the ghost recovery.

• 23:01Speaker 03

  Of the ghost recovery of like, we didn't really go through a recession, but we went through something. We didn't really have a recovery.

• 23:07Robin Rauzi?

  But it was something.

• 23:08Speaker 03

  It's not normal to predict a recession in the US economy for multiple years.

• 23:13Robin Rauzi?

  Yeah.

• 23:14Speaker 03

  This is not normal. And I think that we were getting back to normal and this administration stopped us in our tracks. And it's a deliberate policy choice that has stopped us.

• 23:24Robin Rauzi?

  Well, but I want to think about what the jobs revision told us about 2024.

• 23:30Speaker 03

  So the jobs revision that we got a couple of weeks ago, it was this monster number of 911,000.

• 23:37Speaker 03

  And it refers to job growth.

• 23:39Robin Rauzi?

  That meant that there were 911,000 fewer jobs created in 2024.

• 23:45Speaker 03

  Created from April of 2024 to March of 2025.

• 23:51Robin Rauzi?

  Okay.

• 23:52Speaker 03

  And that number itself will also be revised.

• 23:55Robin Rauzi?

  Right.

• 23:55Speaker 03

  And it won't be finalized until March of 2026. So it's a full year lag. I will not know with certainty how many jobs were added in March of 2025 until March of 2026. I think what's happening is that people are getting deeper and deeper into the workings of federal statistics, and they're not quite in the ecosystem enough to understand. Like, they have been telling us for months that they can come up with a monthly prediction of the overestimate, given the data that they publish along with the estimate. And then they also tell you where they think that the estimate came from.

• 24:32Robin Rauzi?

  You're saying they're trying to tell you why they think the initial measurement is differing from the measurement that they're at at this point?

• 24:41Robin Rauzi?

  And in this case, what was that reason?

• 24:44Speaker 03

  Drift from the birth-death model.

• 24:46Robin Rauzi?

  Oh, right. Of course.

• 24:48Speaker 03

  Of course.

• 24:49Robin Rauzi?

  Of course. You should explain what the.

• 24:51Speaker 03

  Drift from the birth-death model?

• 24:53Robin Rauzi?

  Well, I think you might.

• 24:54Speaker 03

  You want to explain it? Okay. So if I want to know with almost certainty how many jobs were added in March of 2025, I know exactly how to do it. I just look at tax records. Because companies and businesses, they have to pay the payroll tax. But the problem there is that it takes a long time to collect that data. One, it's a census. So we're talking about 160 million records that you have to go through and check and compile and so on. And two, it has reporting issues. Some people don't pay their quarterly taxes on time. They're basically telling us that they're going to come up with the final estimate of the number of jobs in March of 2026.

• 25:34Robin Rauzi?

  Right.

• 25:35Speaker 03

  Okay, so obviously, we need this data like a little bit ahead of time.

• 25:38Robin Rauzi?

  We need a, we need a assumption picture.

• 25:40Speaker 03

  We need something ahead of time. So the answer is the current establishment survey, where while we wait for the census of employment to come in, we're going to send a survey to employers and ask them how many jobs they have. And that basically takes us to, within days of the month ending, we have an estimate of the number of jobs in the economy. I mean, we found out the August job number on September 5th.

• 26:08Robin Rauzi?

  Right. I mean, that's just like a constant survey and from which they create the estimate of jobs numbers.

• 26:13Speaker 03

  Yes. So the survey has, there's basically two types of revisions. From this first number that comes out, the first kind of estimate and set of revisions comes from the survey collection itself. Not everyone sent in their August survey by September, and so they'll send it in in September and October. And so this number is revised twice. These are the monthly revisions that come in every jobs report. The second set of revisions are how good was my survey? Because my survey has to predict basic things about employers in the United States, including the number of new employers that are being added and old employers that are leaving in what we call the birth-death model.

• 26:50Robin Rauzi?

  But, but they're not, they're not like trying to find those companies and add them to the survey. They've got some kind of model for how many companies there are, how many firms are, how many employees they would have.

• 27:00Speaker 03

  Yes.

• 27:00Robin Rauzi?

  And they're using this, this survey, just like they do kind of political polling, right? You have a model, and then you do the survey, and you kind of run it through this model so that it's, they think it's more accurately reflecting reality. And in this case...

• 27:14Speaker 03

  Yeah. And the, the birth-death model is based on a, like a moving historical average of like, I'm going to look at the birth and death of firms in the US over the past three years, put that into an average, and that's what's feeding into the survey. Well, the last few years have been like, kind of messed up.

• 27:29Robin Rauzi?

  Yeah, yeah.

• 27:30Speaker 03

  What we found out was that the assumption of firm growth was the overestimate.

• 27:35Robin Rauzi?

  So it's like, a lot of people started businesses, maybe during the pandemic, working from home, and then those all evaporated?

• 27:40Speaker 03

  Or just that, that was at such a high pace that we overshot. The last two benchmark revisions of, of which is, you know, a lot of it is drift from the birth-death model. The last two have been negative. The one before that was large and so positive, where basically it underestimated business growth.

• 27:58Speaker 03

  And then I think the model took that into account and then it was overestimating business growth.

• 28:02Robin Rauzi?

  Uh huh.

• 28:03Speaker 03

  So it pushed down average job growth over that period from around 150,000 to 75,000.

• 28:10Robin Rauzi?

  Per month.

• 28:11Speaker 03

  Per month.

• 28:12Robin Rauzi?

  Added.

• 28:13Speaker 03

  But the unemployment rate's not changed.

• 28:15Robin Rauzi?

  I know, which is really interesting. It's interesting that the unemployment rate seems to stay really steady even as they keep, we keep adding jobs. And I think that says something about how much unseen slack there is in who could be working but isn't working and isn't unemployed.

• 28:29Speaker 03

  Well, and the unemployment rate's not a population estimate.

• 28:32Robin Rauzi?

  Yeah.

• 28:33Speaker 03

  And the population is changing because we're actively deporting people. And, and the number of asylum seekers entering and how they affect the labor market, there were a lot of think pieces in 2022 and 2023 that the reason why our unemployment rate was low was because all of these immigrants were coming in and kind of basically boosting economic activity through their presence and working. But that story is not the same today. And that's a population that's hard to define, but in terms of the unemployment rate, it's just measuring people who either have a job or say they want a job and are looking for one. And so it's a moving target, less so than just like everybody who's a firm and they count the number of jobs you have.

• 29:17Speaker 03

  The people move more than firms do.

• 29:19Robin Rauzi?

  Hmm. The labor market always wants to be in motion, or, or maybe we want it to be in motion. But I think that, that can seem maybe counterintuitive. It sounds like we want people to be thrown out of jobs and have to go find new ones. But conversely, we want for there to be openings and opportunities and change, and we want companies to be able to evolve along the lines of what they, their future needs are as opposed to their past needs. How does that kind of question about turnover and the necessity of turnover relate to full employment? Like, you never hear like, this is full employment. Full employment feels like a moving target to me.

• 29:57Speaker 03

  Oh, it to, it absolutely is. And the Fed has a dual mandate to keep inflation in check and to maximize employment. So this low inflation, low unemployment, which the Phillips curve says there should be a tradeoff between, that is the mandate of the Fed. The dual mandate, the dualness of the employment side wasn't added until the late 70s.

• 30:20Robin Rauzi?

  Oh.

• 30:21Speaker 03

  I mean, it was kind of always there, but it was not explicitly added of like, no, it's dual. It was like prices, also employment too. And then in the seventies, it was like, no, employment too. But the price marker is like, let's keep it at 2%, 2.0%. That's that's the inflation target. Very clear. Unemployment target is like, well, could be four.

• 30:45Robin Rauzi?

  Could be three.

• 30:46Speaker 03

  Could be three. Some people argued it was five in the Great Recession. So it's it's a lot different of what it means to have full employment. And really, full employment is more easy to detect, less by the number of the unemployment rate and the features that the labor market is exhibiting, like high wage growth, high hiring rates, rapid absorption of new workers into the economy, expansion of the labor force. Lots of things happen when the market is at full employment. And we've seen that happen at different unemployment rates.

• 31:14Robin Rauzi?

  When the National Bureau of Economic Research, or whoever declares recessions, are they looking at all of those things about employment? Yeah, you have to use your words. You can't just not. Like, you gotta say you agree.

• 31:24Speaker 03

  Say yes, sorry.

• 31:25Robin Rauzi?

  I said something. I said something that didn't sound stupid.

• 31:31Robin Rauzi?

  Come on. Throw me a bone here.

• 31:34Speaker 03

  In fact, yes, that is accurate. A recession comes from a broad decline in economic activity. When they look at that, they're looking at a bunch of different features of the labor market. And in fact, there have been recessions where the US, they go back and say the recession started at this month, and the US added jobs for another six months.

• 31:52Robin Rauzi?

  Really?

• 31:53Speaker 03

  Mm hmm. So there's no hard and fast rule. And then you don't want a hard and fast rule, because then the economy could be fine, cross over some benchmark that's typically associated with recession, and then automatically we're in one. So at any given time in the US economy, you can expect somewhere between 1.5 and 1.9 million people to be laid off in a given month. And that's

• 32:17Robin Rauzi?

  That's just typical. That's just like average.

• 32:19Speaker 03

  That's just typical.

• 32:20Robin Rauzi?

  Every month.

• 32:22Speaker 03

  And that encompasses really any reason why a job has ended and the employee didn't initiate it. So it's not quits, it's not that they retired, it's that they were fired for cause, laid off, you know, not for cause, laid off for business reasons, the shop closed, you know, it's a temporary layoff, but it's, it's just like your job ended and it was not because you wanted it to end. That is a layoff and discharge. And there's about 1.5 to 1.9 million of them a month. I mean, it's, and it's an incredibly flat number. It doesn't really move that much. I mean, right at the start of a business cycle, at the start of a recession, layoffs and discharges jump up, but then they go right back down.

• 33:04Robin Rauzi?

  They, what do you mean they jump and then they go right back down in a recession?

• 33:07Speaker 03

  You know, if you think of a recession as being when a bunch of people lose their job, really a recession is when a bunch of people can't find a job.

• 33:15Robin Rauzi?

  Right.

• 33:16Speaker 03

  And layoffs themselves rarely sustain for that long. If you have a period of elevated layoffs, it's, it's like three to six months tops, tops, and then it goes right back down. So that it's a pretty steady churn of layoffs and discharges out of jobs. The things that fluctuate a lot more are hires and quits.

• 33:34Robin Rauzi?

  Hmm.

• 33:35Speaker 03

  Quits tend to go right with the strength of the labor market. So the stronger the labor market, the more people are quitting. And so it's much more of a fluctuating measure where when the unemployment rate is high, people don't quit their job. When the unemployment rate is low, people quit their job.

• 33:51Robin Rauzi?

  Yes.

• 33:51Speaker 03

  Over the past five years, quits peaked in the spring of 2022, when you had like four million people quitting their job every month. And then it has since fallen to little over three million. But I mean, one thing to bring up about the labor market right now is that we're still seeing really high quit rates.

• 34:11Robin Rauzi?

  Really?

• 34:12Speaker 03

  Relative to past periods. So quit rates right now.

• 34:17Speaker 03

  Are where they were in most of 2016 and 2017. And hires have also fallen. Hires and quits move in tandem. They tend to go in the inverse of the unemployment rate. Hires right now are low and they've fallen a ton. Right? You can feel the labor market slowing down and you can see it slowing down, but it's still not at necessarily like recession levels. It's still about where the labor market was in 2015 and 2016 as we were basically coming

• 34:50Robin Rauzi?

  Coming out of recession, yeah.

• 34:51Speaker 03

  But you know, the nadir of the Great Recession's labor market was the summer of 2009. So this is six years past that is where we are with quits and hires right now.

• 35:01Robin Rauzi?

  I just feel like I've been reading that we've had, we have a low quit, low hire, but you're saying quits are actually pretty average.

• 35:06Speaker 03

  I mean, they're low relative to what they were two years ago.

• 35:11Robin Rauzi?

  2022, yeah.

• 35:12Speaker 03

  Yeah, relative to 2022, they're a lot lower. I think what's, what's kind of remarkable is that they have fallen lower without tipping into a recession.

• 35:23Speaker 03

  So here's, here's the part that makes this kind of an, you know, the quandary of our current economic era is that these two things have fallen while unemployment has not gone up.

• 35:32Robin Rauzi?

  Yeah.

• 35:33Speaker 03

  So, you know, normally like, yeah, unemployment rate's 8%. I am not quitting my job.

• 35:38Robin Rauzi?

  Yeah.

• 35:38Speaker 03

  Like I, unemployment rate's 8%. I've been looking for jobs. I can't find one. Hires are low, quits are low. The unemployment rate is still just above 4% and hires are low and quits are low. So what we're seeing is basically the labor market is slowing down without creating excess slack. Everything else in the labor market, it's giving off tons of features of like, these are things that happen in a recession. But in a recession, the unemployment rate is not 4%. And like, we're seeing the wages slow down because movement is what creates wage growth.

• 36:12Robin Rauzi?

  Right, yeah.

• 36:13Speaker 03

  Right? I, I, I get a new job.

• 36:15Robin Rauzi?

  Quit my job, I get a new one with better pay.

• 36:17Speaker 03

  Yes, or I get that job offer and go back and say, they're going to give me $10,000 more, you need to give me $10,000 more too. So we're seeing the slowdown of this low fire, low hire, low quit economy, but it has not been associated, because we haven't really had any peaks of layoffs, it hasn't actually been associated with a high unemployment rate. So it's a labor market that's slowed without falling. Our economy doles out a fair amount of pain on the regular, even when everybody else is doing fine. And even when we're in a recession, even in the worst economy we've ever had, the vast majority of people were fine.

• 36:55Robin Rauzi?

  Even in the pandemic, which is pretty shocking. You know, we've got a basically, you know, huge swaths of the entire economy just shut down and 80% of people still

• 37:08Speaker 03

  Had their job.

• 37:08Robin Rauzi?

  Still had a job.

• 37:10Speaker 03

  Yeah. I can understand why people would feel like they're ignored because most of the economy is doing well and you're not. But that's a permanent feature of our economy. There are always people that aren't doing well. And what makes an economy bad is more people are added to that minority group. And maybe they didn't expect to be there. Or maybe they're surprised to be there. Or they feel like they don't belong there or that no one cares that they're there. But it's still a relatively small group that dictates how we feel about the economy overall. That's tough. And you'll hear that. And it's not as if everyone's perfectly fine in a recession, right? It's still hard to get a new job, to switch jobs, to sell your house, to borrow.

• 37:54Speaker 03

  Like, the interest rates are moving and you can't really yell at your boss because you're kind of afraid to quit. Like, it affects you, but it doesn't devastate you.

• 38:02Robin Rauzi?

  Right.

• 38:03Speaker 03

  And I think in some ways, a recession is a measure of how many people on the labor market are truly suffering versus just suboptimal.

• 38:12Robin Rauzi?

  And I think that there's also the sentiment piece to this, too, which is just what you were explaining, which is how do you, you know, how do you feel about the economy versus how is the economy treating you? Right? I can't tell you how many conversations I've had in the last three months or even last three weeks about choices that people are making because of fear that the economy isn't stable, which you worry about. I mean, I worry about becoming a self-fulfilling prophecy. You know, if people aren't either because of

• 38:52Robin Rauzi?

  Tariffs or because of perceptions of what tariffs are going to do or perceptions of what's happening with inflation that they decide, you know what, I'm just not going to buy a new car. I'm not actually going to hunt for a new house. I literally had that conversation the other day with somebody who's like, I'm, I'm just going to sock away cash because I don't know what's going to happen with my job because my job is tangentially related to nonprofit funding, which is then related to government funding, you know, and we're waiting, everybody's waiting for this, for these things to ripple through the economy and they don't know if it's going to reach them or not.

• 39:28Speaker 03

  You're absolutely right. And it, and it's a very uncontrollable aspect of our economy of how much mood can influence behavior and therefore how, and then, and then by extension, how much

• 39:38Robin Rauzi?

  Animal spirits.

• 39:39Speaker 03

  Animal spirits, how much behavior influences, you know, tangible economic activity that we measure. In some ways, I go back to like the ghost recession, ghost recovery where we have had the rug pulled out from under us. Like we are supposed to be in a recovery right now from that weird recession that didn't happen, but still hurts. And that's not, we're just not seeing it. So

• 40:02Robin Rauzi?

  Here's my metaphor. Are you ready for my metaphor?

• 40:04Speaker 03

  Oh, what's your metaphor? Oh, please don't be better than mine.

• 40:07Robin Rauzi?

  I find, I think it's the ghost recession metaphor. It was like you narrowly averted an accident, but you still had this rush of adrenaline.

• 40:16Speaker 03

  Oh, oh, we're like you, like the car in front of you has stopped and you like swerve and don't, you don't hit it, but you're like

• 40:22Robin Rauzi?

  And you're just like, you still got like white hair out of the whole deal, right?

• 40:26Speaker 03

  Yes. Yes. That's actually so good and simple. So can I do my complicated one?

• 40:31Robin Rauzi?

  Sure.

• 40:33Speaker 03

  So I was trying to explain to someone that the US economy is never like batting a thousand.

• 40:39Robin Rauzi?

  Yeah.

• 40:40Speaker 03

  Right. It was like unemployment's never zero. Wage growth is never perfect. You know, it's kind of like a boxer. Like they get hit in the face.

• 40:47Robin Rauzi?

  A lot.

• 40:48Speaker 03

  It's not as if, a lot. They get in the face. They get hit in the side. It's not a recession until they hit the mat. They land punches and they take punches, but like we don't really think of it as a recession until they actually fall down. That doesn't mean that they're doing great.

• 41:00Robin Rauzi?

  Doesn't mean it didn't hurt.

• 41:02Speaker 03

  Doesn't mean it didn't hurt, but like there's a difference between having a black eye and winning the match versus having a black eye and being on the, on the mat.

• 41:11Robin Rauzi?

  No, I think it's pretty good.

• 41:12Speaker 03

  Okay, all right, so.

• 41:13Robin Rauzi?

  It's, I don't know that it gets at the question we started out with, which was about the downward revisions of the jobs added, but I did want to point out too, that just because there was a downward revision of the number of jobs added, it doesn't mean that we weren't adding jobs.

• 41:27Speaker 03

  No.

• 41:27Robin Rauzi?

  It just meant that we overestimated how many new jobs were added.

• 41:31Speaker 03

  Well, the friend I was pitching this to pointed out to me, they're like, well, then what's your job as an economist? And I was like, I think I'm the corner man. Like I, like in Rocky, I'm the guy, like, I'm the corner being like, no pain. No pain.

• 41:49Speaker 03

  Like you want the guy being like, no pain, keep going, because you do not want the economy to fall down.

• 41:54Robin Rauzi?

  Yeah, you should be the ref, I think.

• 41:56Speaker 03

  Maybe I should be the ref. I want to be the corner man.

• 42:02Speaker 03

  You know, the number of jobs added in a month, reiterating what Robin said, it does not mean we lost a million jobs. It just means that we overestimated the number of jobs by about a million. And how bad is that is really a question of, well, how many did we need to add?

• 42:16Robin Rauzi?

  Yeah.

• 42:17Speaker 03

  And throughout the past 50 years, the number that we're aiming for each month changes. In part because the economy is getting bigger. So it'd be kind of wild if we added like 150,000 jobs in like 1951, when the labor market itself was so much smaller, although they did have some really hot months back then.

• 42:38Speaker 03

  So what was crazy about the US economy passing the 1970s in terms of job growth is that that was when the baby boomers were basically young and entering.

• 42:46Robin Rauzi?

  Entering the workforce, yeah.

• 42:47Speaker 03

  And they were entering the workforce and it's like, Jesus, there's millions of them. Like, we need so many jobs. So that, that made our pace of job growth pretty incredible. The population right now is at a really incredible moment in terms of growth, because if you look at the prime age workforce this century, in most years, the growth and the size of that population comes from immigrants. But in some years, it comes entirely from immigrants. Like if we tomorrow said, there is no more immigration to the United States, starting tomorrow, our population would immediately decline. So.

• 43:26Speaker 03

  You know, maybe two, five, 10 years ago, we needed to add 150,000 jobs every month. You know, the estimate had for a long time had been somewhere between 125 and 175. Like, we need to add this number. Well, given what's been going on with immigration and the number of people that are being deported and the number of people that are kind of not showing up to the US or choosing not to go to work and are voluntarily leaving the labor market or the population, there's recent estimates is that it needs to be as low as 75.

• 43:57Robin Rauzi?

  Wow, that's like half.

• 43:59Speaker 03

  Which is half, which is what it was revised down to.

• 44:02Robin Rauzi?

  Yeah.

• 44:03Speaker 03

  It basically was revised down to around 150 average to around 75 average. And so this is, I mean, the way that economists read this number, a lot of them were like, man, does that mean the mark is actually 75?

• 44:14Robin Rauzi?

  Oh.

• 44:15Speaker 03

  Or it could be lower. It could be the mark is actually 25 to 50 because we are seeing such a slowdown in the population behind the growth in the workforce. That's, that 50 to 75 is a great number, but the number of jobs is a moving target. And that we know that that target is moving, it's actively being moved. Now, people think the target is definitely somewhere between 50 and 100, and they land around 75. And so I was talking to a set of economists and what we were saying was, I wonder if it's actually been 75 for the past two years.

• 44:47Robin Rauzi?

  Yeah.

• 44:47Speaker 03

  And that's why these, like, the numbers got revised reflecting that this, what we were growing at a steady pace and our steady pace is much lower than we thought, much earlier than we thought. All these revisions and everything going on in our economy, it raises so many questions amongst economists that like, don't come up in any of these stories. And sometimes I feel like we're in, like, the private group chat that America needs to be let in on.

• 45:13Robin Rauzi?

  No, that's a really, I mean, what you were just saying about the number of jobs we need to be adding to keep up with the growth in our population or the growth in our economy is really, I mean, that's not a story I'm reading yet.

• 45:24Speaker 03

  Another one is, we haven't seen an increase in layoffs. But is the return to office mandate a backdoor way to lay people off without saying they're being laid off? And to what extent is that occurring? I mean, that's impossible to tell from the data that we have now because we only have quits versus layoffs and discharges. So we don't know how many people are basically being forced to quit because they don't want to go back to the office.

• 45:49Robin Rauzi?

  Right.

• 45:50Speaker 03

  And so this is a way for them to lower their payroll.

• 45:53Robin Rauzi?

  Yep. For companies to lower their payroll without actually laying people off.

• 45:58Speaker 03

  You know, the problem there is that that's definitely happening, right? People are quitting because of the return to office mandates. But because we haven't actually seen a decline in employment, if that is happening.

• 46:08Robin Rauzi?

  A decline in employment, you mean a rate, a lift in the unemployment rate?

• 46:12Speaker 03

  And an actual reduction in the number of jobs.

• 46:14Robin Rauzi?

  Okay, okay.

• 46:15Speaker 03

  If, to the extent that that is happening, which it certainly is, it seems like those workers are being re-employed pretty rapidly.

• 46:21Robin Rauzi?

  Mm-hmm.

• 46:22Speaker 03

  You know, we don't have an answer yet of how return to office is warping the statistics that we look at for economic health, even though we know it's doing something. We don't know what. So these are the types of questions that like, I think that economists are, you asked me once how would labor, what would our labor economists, if you guys are all at a bar, what would you be talking about? These are the questions that I think are coming up of, of not questioning the statistics because it doesn't match the reality of our lived experience, but wondering what they're missing, given trends in the labor market that are hard to capture with the data.

• 46:52Robin Rauzi?

  Yeah. I keep seeing stories where CEOs are projecting these further return to office mandates. It seems to be that they're just sort of signaling to their workforce, go look for another job if you're not ready to come back to the office. Like it's like a pre, it's like a, yeah, shot over the bow, right?

• 47:08Speaker 03

  Yeah. Yeah. You need to, you need to quit.

• 47:11Robin Rauzi?

  Yeah. Or it's coming and you should start looking.

• 47:14Speaker 03

  Yeah. Also, for what it's worth, I do think next year's BLS revision will also be large and negative because, well, for a few reasons. But I think right now, the number of federal employees that have not been fired but do not have a job is pretty high.

• 47:33Robin Rauzi?

  Or maybe still getting paid, but maybe.

• 47:34Speaker 03

  Oh, no, they're getting paid. I know federal workers who have been paid full-time, accruing paid time off for five months, and they're not allowed to go into work. The people who took deferred resignation and they voluntarily left, they're still getting paid. That ends on the first.

• 47:48Robin Rauzi?

  Okay, so the job is coming up.

• 47:49Speaker 03

  Then there are people who are on administrative leave where they're not allowed to go into work, but they're going to be fired once the administration gets legal permission to do so. So at the moment, they're just getting paid full time, accruing all of their PTO and retirement and so on.

• 48:03Robin Rauzi?

  And not doing any work.

• 48:04Speaker 03

  And not doing any work. And I mean, they're being told, you cannot do any work. Sometime in the next few months, all of those people will show up. And that will be a big, bad number when it finally shows up.

• 48:14Robin Rauzi?

  Yeah.

• 48:15Speaker 03

  If they are successful at firing as many federal employees as they would like to be. So there's bad things coming on the horizon.

• 48:22Robin Rauzi?

  Mm-hmm. I mean, you know, as we were just saying, they're in the position of knowing, knowing that that's on the horizon for them.

• 48:30Speaker 03

  And they are looking.

• 48:31Robin Rauzi?

  And they might be looking for another job. They might be thinking, okay, well, I'm just going to retire early. They might.

• 48:37Speaker 03

  Be taking up woodworking.

• 48:40Robin Rauzi?

  But they might also just be hoarding cash as much as they can because they know that they're going to have to ride out, you know, a six-month job hunt.

• 48:49Speaker 03

  Yeah. Or they've been actively looking this whole time.

• 48:53Robin Rauzi?

  Probably, yeah.

• 48:54Speaker 03

  And even if they got another job, do they need to quit the one that's paying them and telling them they're not allowed to work, but they get to accrue vacation? I wouldn't. So there are some bad things coming.

• 49:08Robin Rauzi?

  Optimist economy. There are some bad things coming.

• 49:11Speaker 03

  There's bad things coming. What I find interesting about the, the number of conversations and the attention given to the BLS benchmark revision of 911,000 is that if you asked me, like, what do you think is the weakest part of our labor market right now? I would say it's that 70% of job growth over the past year has come from education, healthcare, and state and local and federal government. It's mainly state and local, but like 70% of our job growth are coming from industries that do not reflect economic activity.

• 49:41Robin Rauzi?

  What do you mean, they don't reflect economic activity?

• 49:44Speaker 03

  Well, like, manufacturing is down 70,000 jobs, like, year over year.

• 49:48Robin Rauzi?

  Yeah, extraction industry is down.

• 49:50Speaker 03

  Professional and business services, which is a huge part of our company, I think it's like 14%, it's also not growing, and it might have lost jobs. But that tends to reflect things like consumer demand, whereas healthcare reflects lots of old people.

• 50:05Robin Rauzi?

  Right, right.

• 50:06Speaker 03

  And more every day. So.

• 50:10Speaker 03

  We're not seeing growth in the labor market in sectors that are a reflection.

• 50:15Robin Rauzi?

  It's a disconsumer demand.

• 50:16Speaker 03

  Yeah. Yeah, or like business demand.

• 50:18Robin Rauzi?

  And the consumer sentiment stuff is showing us that, too.

• 50:21Speaker 03

  Yeah. Okay, so what's the optimism here? Y'all, we're gonna go back to a couple. I don't want to leave this episode on like a dour note. The optimism, one, is that we didn't lose a million jobs that we thought we had.

• 50:32Robin Rauzi?

  Right.

• 50:33Speaker 03

  Really. We overestimated. We overestimated by a million and no one like lost their job or there weren't like a million people who were jobless who we never counted before. Like, this is all about complex estimation methods of trying to hit a moving target.

• 50:47Robin Rauzi?

  That is, that's good.

• 50:48Speaker 03

  So that's one. The second would be, you know, as cruel as this can sound, even when the economy gets at its absolute worst, most people are fine. And statistically, that most people will include you. And people lose their jobs and people have a hard time finding a job. But like, whatever the US economy has been through, it has always bounced back into a growth cycle. And, okay, well, maybe if I could like, force my boxing metaphor further in terms of optimism. I mean, this tariff policy is in some ways like catastrophic, and we're still mostly fine. I mean, it is a testimony to how strong the US labor market is and how strong the US

• 51:32Speaker 03

  economy is, is that even as we are like sabotaging export markets and import goods and making things deliberately more expensive and business harder to manage, like, we are also still fine. Like, we, it's not like we're spiraling into a depression even as we're pursuing these really destructive policies because we do have a very resilient economy. And even that punch in the face that like knocks us down to the mat, we'll get up. And that's what our economy does. Like, we go through recession and then it goes back to creating more jobs and lowering unemployment and having more quits and layoffs and generating wage growth. And sometimes it's anemic and sometimes it's strong. And those periods of weakness are terrible, but they're not forever and they don't affect everyone equally. So that's the preview for next time.

• 52:16Robin Rauzi?

  We're going to talk a little bit, yeah, about how to make it less cruel.

• 52:20Speaker 03

  We're going to talk about how to make it less cruel, yeah. In some ways, I think that the reporting of things like the stock market,

• 52:26Robin Rauzi?

  Yeah.

• 52:27Speaker 03

  which is a really jumpy number and reflects a lot of gambling and betting, both makes the economy seem much more volatile than it is, but also makes the peaks and troughs of the economy seem more severe. I always thought the stock market is like your most dramatic richest friend reacting to the news of like, oh, my God, did you hear 900,000? Jesus, I cannot believe this. We need to, I mean, they're going to cut rates, so I'm going to bet on everything. And then it's like, um, he said at the meeting that he didn't know if prices were going to go up. I have no idea where I am anymore. And like, I'm just going to sell everything. Like, it's a, like, they're very dramatic in their reaction. Businesses don't react that way. Consumers don't react that way. Workers don't react this way.

• 53:11Robin Rauzi?

  Traders react this way.

• 53:12Speaker 03

  This group of people that we pay like 80% of economic news attention to are like so effing dramatic. And then, and people are like, well, the market went up. So if the market went up, the economy is fine. I'm like, I wouldn't trust those people to mow my lawn. Look at the numbers that actually matter. That is, that, the stock market represents, on some level, the strength of the companies that are held publicly. And on another level, what a bunch of gambling addicts thinks is going to happen in the next month. So like, don't put too much, like, they, they get a lot of news coverage because they change a lot. We don't get 25 unemployment rates a day. Market doesn't close with like the daily unemployment rate. So they, it gets a lot of attention. It makes the economy seem much more volatile than it really is.

• 53:56Speaker 03

  So don't listen to that friend.

• 53:58Robin Rauzi?

  All right.

• 53:59Speaker 03

  Okay, we're gonna, we're gonna end the show because I've officially talked myself hoarse.

• 54:04Robin Rauzi?

  Oh, my God, it actually happened.

• 54:06Speaker 03

  Just like my great grandma would.

• 54:07Robin Rauzi?

  It said, yeah.

• 54:09Speaker 03

  Okay.

• 54:10Robin Rauzi?

  Executive orders. Catherine, what's your executive order?

• 54:12Speaker 03

  Uh-uh, I think you should go first. We've got another, we're on a theme here.

• 54:16Robin Rauzi?

  Oh, so it's autumn. And I don't know about you, but I hate, hate, hate, hate the smell of cinnamon brooms, which are not brooms. They're just stinky things that apparently people buy to hang on their front door. So there's like a gauntlet of these stinky things at every Trader Joe's you ever go to. And then if you're, God forbid, in a place that isn't warm year round and they put that stuff inside, it's awful. And these need to be completely banned. They should not be allowed to be sold. My sister sent me a picture when they showed up where she lives and she's like, "I'm just warning you, the cinnamon brooms have arrived. No more cinnamon brooms."

• 54:55Speaker 03

  Okay, so I'm just gonna say right now, we are not gonna be sponsored by like the cinnamon council of the US. Like, this is your second or third cinnamon executive order.

• 55:03Robin Rauzi?

  It's my second.

• 55:04Speaker 03

  And getting it out of Trader Joe's. Getting rid of the cinnamon.

• 55:08Robin Rauzi?

  Big cinnamon is not our friend.

• 55:10Speaker 03

  Big cinnamon's gonna come after us.

• 55:17Robin Rauzi?

  We're gonna get it. There's an email coming right now from the lobbyists from the cinnamon industry.

• 55:23Speaker 03

  Big cinnamon, big cinnamon. Big cinnamon is great. Big cinnamon's coming for us. My executive order is that you can't save a table at a counter restaurant without ordering first.

• 55:36Robin Rauzi?

  Oh, yeah. That's just human decency.

• 55:38Speaker 03

  Doesn't always happen in New York City.

• 55:40Robin Rauzi?

  Doesn't always happen in Philly either.

• 55:42Speaker 03

  So this just happened to me in New York and I didn't feel bad for this guy, but he was coming in the door to this little cafe, right as I was, and there was a table open by the window. It was a really nice table. And I looked at it and he came in right behind me and he basically shoved me to get by me to put the stuff down. Now, he didn't see that I was really pregnant and so like, from his point of view...

• 56:05Robin Rauzi?

  So we look like a douchebag.

• 56:06Speaker 03

  Oh, my God. So many people saw him push a pregnant woman into a chair, which I shouldn't have hit if I wasn't pregnant, but I'm pregnant enough that I'm knocking things off of counters. And so I let out this involuntarily, like, "Oh!" As he rushes by me to put a bag on the table. And then when I waddled my way like a penguin to the line, he basically beat me there. And I was like, I was such an asshole about it. I was like, "I don't know what you are doing here, but I'm getting breakfast. But whatever you gotta do, you gotta do. So you go first. I can't handle this right now." And I just did this arm wave. I was like, "I can't handle this right now. So just get in front of me and I don't want to deal with it." He said, "I'm sorry." And I was like, "You're not sorry for the right

• 56:49Speaker 03

  thing. You should be sorry for saving a table without ordering at a counter when there are 10 people in line." Like, why are you better than all of us? So that is my executive order.

• 57:00Robin Rauzi?

  Yeah.

• 57:00Speaker 03

  And honestly, I hope that guy continues to get called out. And for the record, I waited in line, I ordered my shit, and there was a table that had opened up in the natural ecosystem of counter service cafes that when someone had finished eating, that was about the time that I got my food. And I just got to sit down like a human person with dignity.

• 57:22Robin Rauzi?

  I think that's a good rule. They actually have signs in plenty of restaurants in LA that actually say, "Order first."

• 57:28Speaker 03

  So Andy asked, "What did this son of a bitch order?" And I'm just gonna say right now, I bet it had cinnamon in it.

• 57:38Speaker 03

  I bet this was one of those Big Sin emissaries.

• 57:43Robin Rauzi?

  He's a lobbyist for Big Sin.

• 57:45Speaker 03

  He's a lobbyist for Big Sin, basically. Okay, spiritual sponsors.

• 57:50Robin Rauzi?

  Spiritual sponsors.

• 57:51Speaker 03

  Not cinnamon or anything related to it.

• 57:54Robin Rauzi?

  My spiritual sponsor this week is that we have a great horned owl in our neighborhood who, of course, I can't see because they're nocturnal, but I hear every night and I hear at five, just as the sun is first coming up in the morning. And I love him, her. Anyway, this morning I actually heard two. I don't know if they nest together or what they do. But the, the thought of living in the middle of the city, but the wildlife is, is here. And also that, you know, we didn't have a lot of owls for a long time because of, well, frankly, because of rat poison and that people have sort of cottoned on to the idea that if you poison the rats, you poison the owls. And now we have owls back.

• 58:38Speaker 03

  They cottoned on. What a great throwback.

• 58:41Robin Rauzi?

  It's because it's a regular phrase that people use.

• 58:44Speaker 03

  Really?

• 58:46Speaker 03

  My vocabulary absorption from our own show is pretty low.

• 58:53Speaker 03

  My spiritual sponsor this week is history memes that people make for TikTok and Instagram. And

• 59:02Robin Rauzi?

  What do you mean?

• 59:03Speaker 03

  Oh, God, it's really one of these moments where I'm like, oh, my gosh, there's dozens of us. So my sister and I trade history memes. She's better at finding them than me. But this one was a video of a relief pitcher walking out during the playoffs to take the mound and like close the game. But it said in big captions above it, "Grant entering the Eastern Theater in 1864."

• 59:27Speaker 03

  I watched it like 10 times. And now thankfully, the algorithm has just been delivering all these like Civil War history meme jokes to me. And I'm like, this is giving me life, y'all.

• 59:41Robin Rauzi?

  You're such a nerd.

• 59:42Speaker 03

  Oh, man, it's so good. But I was like, but I'm not alone. Like, these videos have millions of views. And like, oh, all the ones making fun of Europe are gold.

• 59:50Robin Rauzi?

  And somebody's making those.

• 59:51Speaker 03

  Someone is making them. Someone's putting the time into them. And I'm like, I don't know who you are or what you do, but I see you and I appreciate you. Please give me more Civil War memes. I am here for it. History memes, history jokes, the history reels, the history TikToks, that are all incredibly sarcastic. Love it.

• 1:00:09Robin Rauzi?

  Love it.

• 1:00:11Robin Rauzi?

  That is our show. At the end, we do want to remind you, you can reach out to us at any time at [email protected]. We also have social media accounts on TikTok, on Instagram, and on LinkedIn. And then, of course, you can see clips of the show

• 1:00:30Speaker 03

  And YouTube.

• 1:00:31Robin Rauzi?

  on YouTube. We don't do a full video version yet because we're not millionaires, but there are clips from the show on YouTube. And that's it, I think. But we need to snap out Sophie and Andy, who produced the audio and video for our show.

• 1:00:48Speaker 03

  And we also need to snap out that Sophie and Andy's studio chat during recording has gotten like a lot sassier from the start of the season.

• 1:00:57Robin Rauzi?

  It's true.