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The Penta Podcast Channel is home to all of Penta's podcasts, including the Macrocast and What's At Stake: A Penta Podcast. The Macrocast, produced by Penta and Markets Policy Partners, features weekly insight and analysis on the latest macroeconomic trends. What's at Stake: a Penta Podcast features in-house experts and often special guests for analysis on the biggest issues shaping business and public policy.
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Macrocast: Countdown to shutdown
On today's Macrocast, Yale Law School research scholar, Martha Gimbel joined Ylan, John, and Brendan for a discussion on the likelihood and consequences of a potential government shutdown. The group breaks down potential economic fallout, the uphill battle for unemployment benefits, and even the possibility of air traffic controllers stepping in to force an end to the shutdown. Martha also offered her take on the Biden administration's economic policy, the influence of rising mortgage rates, and the domino effect of gas prices and supply chain issues on consumer sentiment. Buckle up and let's unpack the chaos together.
Hello and welcome to today's episode of the macrocast. I'm your host, ilan Mui, a managing director at Penta. My co-hosts are John Fagan and Brendan Walsh of Markets Policy Partners, and we are now officially in the countdown to shutdown. Congress has until midnight on September 30th to get its act together or we will fall into what is politely known as a funding gap. Thankfully, today we have a special guest with us who can help us make sense of all of this or at least commiserate with us and all the chaos. Martha Gimbal is a research scholar at Yale Law School. She was a senior advisor at the White House Council of Economic Advisers under President Biden. She also worked at the Congressional Joint Economic Committee, the Department of Labor, as well as in the private sector. So, martha, thank you so much for joining us. Thank you for having me, absolutely. So let's just start with the basics. We've got a lot of dysfunction in DC. The government could stop working, but what does that mean for the rest of the country? How are they going to see the ripple effects of this?
Speaker 2:So I think we should put it into sort of two categories. One are the things that will kind of show up immediately and the other are the sort of effects that will compound over time. So you know one immediately national parks shut down. I am not an outdoors person, so for me I'm like this seems fine, but for many people this is a huge deal. It is perfect weather to go out to the parks right now. I will have to trust you as an indoors kid on that.
Speaker 2:You know there's a bunch of day-to-day government functioning that just won't happen. At the same time there is a large part of government that will technically keep functioning right. So, like, air traffic controllers will still be going into work. They just won't be getting paid. People who are sending out the social security checks will still be going into work. They just won't be getting paid and over time that compounds for a couple of reasons. You know one you're sucking a large amount of money out of the economy and that does have impacts. But two not being paid is bad for most people and it means that you know the quality of work that you're getting starts to go down over time In the long run. It makes it harder to recruit people into government and also, you know, the government is losing worker hours that they're going to pay for at the end of the shutdown anyway, and so, as taxpayers, at the end of this we're not getting a lot of work that we paid for.
Speaker 1:So not really an efficient way to run an enterprise. Certainly, is there any way to quantify the economic costs of a shutdown and what they might be? I know there's been a lot of estimates in the past. Workers aren't getting paid now, but they won't get paid eventually.
Speaker 2:Yeah, I mean one thing to keep in mind right is not everyone gets paid. So the federal government does work with a lot of contractors. They are likely not going to get paid because they're not working and they get paid when they work. You know there's been a variety of estimates. Goldman Sachs has said that GDP growth will be lower by about 0.2 percentage point for each week the government is shut down. You know, we're all guessing. I think one estimate that's useful is the last shutdown we had, which was quite protracted. So, cbo, that first quarter of 2019 GDP growth came in at 3.1%. I think many people here might hear that number and be like oh great, great number on GDP growth, so like no impact. But of course, you have to think about the counterfactual. And so CBO said that if it hadn't been for the shutdown, gdp growth would have been about 3.5%, and that's a pretty big hit right there, john and Brendan how are the markets baking all of this in, if they are at all?
Speaker 1:Is there any reaction that we can see in financial markets?
Speaker 3:Well, the standard market reaction is to look through it. You know, typically it doesn't last longer than a month and you get the back pay and you get sort of the you fill in the divot, I guess in sort of golfing terms, you replace it. Maybe there's a little bit of slippage, obviously, as Martha has outlined, but for the most part it's something that markets tend to look beyond and in this environment, actually, you know, you have a situation in which there's a lot of interest in what the Fed is going to do next and, to the extent that you know, a government shutdown is going to keep the Fed from, you know, doing any more hiking, and that's something that Minneapolis Fed President Neil Koshkari included in his remarks this week, which were covered pretty significantly by market participants. You know, this is that's actually kind of okay for the markets and to keep the Fed, stay the Fed's hand for a little bit longer.
Speaker 3:So, all in all, right now it's, it's not a scene as a big negative. But you know, at the same time, context matters and it's happening alongside the auto worker strike. It's happening alongside, you know, signs that the consumer might be tiring out in the face of elevated gasoline prices and so on and so forth. So it's, you know it's. It obviously represents some kind of risk, but there's a little bit of the silver lining, I think, from the market perspective when it comes to it.
Speaker 4:And the last two days equities have rallied. But it's kind of hard to detach what is going on because we got a the Fed's preferred price inflation measurement this morning and it came in below expectations. But also there's a way that you can figure out because most of the data comes from the CPA and PPI. So we, if you were following it, you knew that it was going to be a point one. So I think part of the, the, the market reaction yesterday and today because equities are up and bonds are down probably had more to do with the inflation measurement than the the, the possibility that this shutdown could caused the Fed to not raise rates anymore, because that was what kind of got the market selling off the previous week. A lot of commentary after the meeting well, both at the meeting and then after it, saying we're serious about staying higher for longer.
Speaker 2:You just mentioned the inflation measure that came out this morning, which was very exciting, but if the government shuts down, we don't get any of that data.
Speaker 4:And we're supposed to get the jobs data next week from today. Right, we won't get it.
Speaker 2:And so we're at this kind of inflection point for the economy. I think a lot of us are watching really closely to see what's going to happen.
Speaker 4:Couldn't be a worse time to not get data.
Speaker 1:Yeah, Take us inside a little bit if you can, Martha, because I know that you used to work at DOL. You don't have to give up any state secrets here. But what goes into the measurement? I mean, if the government shutdown is very short, let's say we opened up again on Thursday, but the day before the jobs data is due, could they get it out, and what types of additional indicators might suffer, even if the government is reopened, because we're not able to collect the inputs that go into calculating the economic data?
Speaker 2:Yeah, so it's going to depend on the particular indicator. So, as an example, eta at DOL puts out weekly claims every week. Those are collected by state UI agencies and ETA does some processing on the back end.
Speaker 4:And the check is attached to that. So that's not a survey or anything. That's a real number.
Speaker 2:That's relatively easy For the jobs report. The survey period is the 12th of the month, and so they have the data right now.
Speaker 4:They're just finishing up processing it, and I think they don't really finish it until the day before, maybe two days before they're working on it right till the end.
Speaker 2:Right, exactly I mean.
Speaker 4:so they have a good idea what it is, and they don't finalize it until a couple days before.
Speaker 2:Yeah, I mean they're ready to brief the White House on the data the day before, usually starting around noon.
Speaker 4:And President Trump, let us know that he does get it before, because one time he slipped, I don't think I've ever screamed as loudly as I did when I saw that tweet, Just as a brief digression, when I've been at CEA.
Speaker 2:Both times you get the pre-release economic data and you take this incredibly seriously.
Speaker 4:It's a big deal.
Speaker 2:Yeah, we lock ourselves in rooms, I won't respond. If I would get an email from comms being like just so you know, the president's going to give a speech on the jobs numbers tomorrow, my response to that would always be I have the numbers. I cannot respond to this email Because I didn't want to be like sounds great that he's giving a speech. People will be like the numbers are good.
Speaker 1:You don't want to say anything that could possibly do.
Speaker 2:any People take this really, really serious.
Speaker 1:Market moving material.
Speaker 2:Yeah, and so it was really wild to see someone just tweeted out there.
Speaker 4:That's not overly unexpected.
Speaker 1:Yeah, but so the jobs number could perhaps be delayed because they have all of the data. But if the shutdown were to persist through the middle of October, then you're talking about not being able to conduct the survey to put out the next jobs data. Yeah, good point.
Speaker 2:Yeah, I mean I would have to check about how exactly they're declaring people essential at the point, et cetera. But it is a bad time to not be having as much data in as pristine condition as we possibly can, and in recent years, people have started focusing more on private sector data, which is a thing I care a lot about. I used to work on a team that worked with private sector data. You have to be really really careful with private sector data. It is not a substitute for corporate data or for government data, and you have to think really carefully about whether or not the private sector data is telling you something about the economy or about that particular company, and I think people are not always careful about doing that, and I think there's been a little bit too much complacency of like oh well, you know, we won't get the jobs report, we won't get these things, we still have ADP. We write exactly what I mean. Well, for better or worse. Well, I wish.
Speaker 4:ADP would just report their actual data and not try to turn it and predict what the jobs number is.
Speaker 2:They've been changing their methodology, though.
Speaker 4:Yeah, but that's not quite good.
Speaker 3:No comment, but I mean, yeah, I mean it's yes, I have preferences, yeah it's really useful, though it's a completely inverse correlated, and if you get a huge ADP number, you can take it to the bank, but non-farm payrolls are going to stink. I mean, that has just been the way it's been. You know, again and again.
Speaker 1:That's like me in directions. If I say you need to turn right, you can rest assured, you need to turn left.
Speaker 3:Yes, being always wrong is almost as impressive as being always right. Certainly useful, the counter indicator.
Speaker 1:Yeah, you know we were talking to in some previous episodes about shutdowns past. Everyone here on this podcast has lived through one, if not many, government shutdowns of varying lengths and you know, when they're short it can be a little bit of a. You know everyone's crying into their beer together, literally crying to their beer at the bar together and kind of maybe enjoying a little bit of time off if it's brief, and then you know you're going to get paid on the back end. But just looking back to that experience of 2018, 2019, when that shutdown did last for 35 days, martha, what did you see around? How that impacted the federal workforce and how people started to view their jobs and their roles?
Speaker 2:Yeah, I mean, as people have to pay their mortgages, people have to pay their rent, people need to feed their families. So I was working at Indeed at the time and we could see, as the shutdown went on, people who were at agencies that were shut down were starting to increasingly look at jobs that were outside of government. If they were at agencies that weren't shut down because, remember, 2018, 2019 was a partial shutdown they were. You know they basically their behavior remained normal, but you know you saw searches by people who worked at the TSA just starting to really really spike over time. And you know this is one of the things that I really do worry about is we do need a functioning government workforce to get stuff done. We need to be able to recruit high quality people into government and if you're concerned that, you know every couple of years you might not get a paycheck for you know some period of time, that's not a really appealing job.
Speaker 1:Yeah, it's one of the reason people go into government service. Obviously there's, you know, sort of the public service aspect of it. But there's also the stability right and sort of knowing that you're going to have good benefits, you're going to have a steady job. But if they keep getting interrupted every couple of years and that diminishes what is one of the selling points of going into government.
Speaker 4:Though, if our neighborhood here is in an education, you don't have to go to the office anymore.
Speaker 1:Right, you have to close your laptop at home.
Speaker 2:I was talking to someone who will remain nameless the other day, who's a career government person, and he was saying that he, after you know 2013, he now has a home equity line of credit on his house, Just in case, just in case. Yeah for future shutdowns.
Speaker 4:But you can collect unemployment checks right.
Speaker 2:You can collect unemployment checks. I will say that's kind of a nightmare process because also keep in mind how long it takes to get approved for unemployment. This is a whole other conversation. But do you?
Speaker 4:have to pay it back. When you get back, you have to pay it back.
Speaker 2:One, you have to pay it back. Yeah, that's my thought. Yeah, yeah yeah.
Speaker 4:Because you actually got your money.
Speaker 2:Right, and you know, even I mean the shutdown in 2018, 2019 was very, very long. But if you had applied for unemployment even at the beginning of that, you might not have been approved. You might not even receive your first paycheck by then, because our UI system is so broken and so slow.
Speaker 4:Yeah, and also in DC, it's where you work, so it's not Virginia and Maryland. So our system in DC just gets overwhelmed when we close down because 30,000 people are flying.
Speaker 3:Well, just not to get too political about this, but what we're talking about is a feature, not a bug, for the. You know the faction on Capitol Hill that is looking to shut down the government and you know, there the point that they're trying to make is about, you know, out of control. To the extent that they're trying to make a point, I guess. You know past government shutdowns have been about, you know, out of control government spending. You know this one looks maybe a little bit more like, you know, a family dispute and has some other strange elements in it. But you know the sort of overarching philosophy of you know a certain you know wing of the Republican Party has been to. You know really shrink the federal government by any means necessary. And you know shutdowns and that sort of thing which make it, you know, when people start looking for jobs outside the federal government. That's not, you know, from the through, a different political lens. Some people see that as a good thing.
Speaker 2:Well, so there's two things I want to say on that, though. So one is I think it's important to remember that if you care about government spending and we can debate how much that group actually cares about government spending- Quite debatable.
Speaker 4:Depends on who is in the presidency.
Speaker 2:Government shutdowns are quite expensive. Like these are not like free things that are just doing and hanging out. So I mean there was a Senate committee that looked at the cost of the last three shutdowns and they found that it cost at least $4 billion. That includes things like lost revenue, having to pay late fees, lost worker productivity, etc. One thing I want to emphasize about that number is they didn't get numbers from DOD DOJ, like there were some fairly big agencies that weren't plugged into that number.
Speaker 2:So $4 billion is almost certainly a substantial undercount. The other thing about shutdowns right is you know, let's say you agree with the idea that government is bloated and too big and all the things. They're a very blunt measure, right, like I don't think Republicans think that no one at DoD should get paid for a month, but that's what's going to happen. It's just a very silly way of doing things.
Speaker 4:Yeah well, especially because Trump took Medicare and Social Security off the table. There's nothing else we spent. Everything is irrelevant. It's a rounding error. We spend money on three things.
Speaker 2:Well, now they're taking what the VA off the table. Yeah, I mean we're down to you know.
Speaker 4:Food stamps I mean basically.
Speaker 1:One of the biggest factors in what the ultimate cost of a shutdown would be is how long it lasts, and right now there's so much political turmoil amongst the Republican Party there are reports that hardline conservatives could try to oust House Speaker Kevin McCarthy by early next week. What would that do to conversations around conversations and negotiations around trying to reopen the government? Unfortunately, there's also been the sad news of the passing of California Senator Diane Feinstein, unclear how quickly a caretaker for her seat could be put back into place and what that means for a timeline of the way things happen in the Senate.
Speaker 4:Another guy's going to jail too.
Speaker 1:There's drama all around here, so I guess this is obviously not a political podcast. This is an economic podcast. But, Martha, I'm curious you know your sort of take on what might be a way out of this and your insider view of how the White House might be thinking about the path forward.
Speaker 2:I mean I will emphasize, I have no insider view on how the White House may be thinking about the path forward I do think it is interesting. If you look back at the last shutdown and I want to emphasize, I was not in government at the time, I have no insider knowledge on this but it was reported that part of what happened was that air traffic controllers basically sicked out and people said we can't do that and everyone came back. There was some reporting later and I actually not realize this that the number of people who called out sick was 10 people.
Speaker 4:That's how many it took to bring it down. You just have to shut down three airports, right, exactly.
Speaker 2:And so I mean the air traffic controller is just….
Speaker 1:Yeah, Atlanta. And.
Speaker 4:Chicago, maybe LA too, but it doesn't take… You're right, it just takes a few people to shut down our entire airport transportation system.
Speaker 2:And the air traffic controllers are already much more strapped now than they were in 2019.
Speaker 4:And so I'm sort of interested… that's a really interesting insight.
Speaker 2:Yeah, I mean. So who knows what will happen? But I'm sort of interested to see.
Speaker 4:Yeah like the Spartans.
Speaker 2:You know I'm going to get up on my high horse about that for just a brief second, and this is a digression, but I was a classics major and people always talk about the 300 Spartans at Thermopylae, but there were a lot of other Greeks there as well. It wasn't just 300 people, it was a group effort. We just only talk about the Spartans.
Speaker 4:It's a way better story. Yeah, it is a much better story.
Speaker 1:I'm not really sure how to move on. I was a classics minor so… there we go.
Speaker 3:I'm talking about memes.
Speaker 1:But one other thing I wanted to ask you about, martha, was around President Biden's poll numbers on the economy Right now. Their poll numbers generally aren't great, but on the economy they're especially poor. I think the latest poll from ABC News and the Washington Post said 30% approval rate of his handling of the economy. Certainly, a shutdown is not good for either political party. What do you see as the disconnect? What is the messaging around the economic policy of the administration that they're trying to put forward and maybe is not getting through?
Speaker 2:Look, I am not a comms person. I will state my open bias here, which is that I worked for the Biden administration and I think the economic policy was pretty good. But I do think it's really confusing. You look at the consumer confidence with the consumer sentiment numbers and they are so low. The University of Michigan sentiment numbers are lower than they were at the height of the pandemic in early 2020. This makes no sense to me. I personally feel much better than I did in early 2020. Yeah, and unemployment?
Speaker 4:is still at all-time low.
Speaker 2:We have a low unemployment rate. Inflation has been high and I do not want to minimize that. If you look at something called the Misery Index, where you add inflation to the unemployment rate, that did really go up, it's come back down quite substantially. I have a hard time understanding this particular moment in people's emotions about the economy.
Speaker 4:John and I were talking about yesterday I will not say it dawned on me because monetary policy works with lag. I think that the reality of higher rates is starting to weigh on people. Rates went up so quickly that you don't usually take out a loan right away, but eventually over a course of 12 months, I don't know you might buy a car really the big one is a house and all of a sudden, like 7% mortgage hit you. They used to be free.
Speaker 3:Yeah, and there's also the fact that prices went up and just the fact that they were seeing the data that they're not really going up, but they're staying at this higher plateau right, it was paradigm shift. Higher People are sick of that. There's this realization that, geez, these prices aren't really going to ever come back down, are they? And that you know there was a lot of ballet. Who about? I think it was the picture that David Brooks took of his launch oh God, our car park.
Speaker 1:Oh, I missed this. What was the picture?
Speaker 3:You know he was trying to, it was obviously he blew it, but I take your picture of a hamburger and a double glass of scotch on the rocks and said that his lunch was $78 and 80% of it was his booze bill.
Speaker 3:That hilarious aspect and sort of you know, obviously, the sort of staged outrage by David Brooks there, Try to let that like conceals a larger point, which is people are, you know, consistently like going into stores and saying like you know, wow, I'm still like getting that like service charge. That was, you know, that was added during COVID.
Speaker 4:Not really the noise people.
Speaker 3:Yeah, and like the 20% tip that is now like inserted in every single place. You know it's just a. There are a lot of sort of underlying dynamics that are inflationary structurally, and you know one of them being gasoline prices. You know the Saudis are very aggressive and OPEC has clearly wanted to keep oil prices elevated.
Speaker 2:So I strongly agree on the impact of gas prices on consumer sentiment. I do want to say one thing about mortgage rates and, to be clear, I am in the process of buying a house, so I have a lot of emotions about mortgage rates.
Speaker 2:Right now they are impacting my consumer sentiment, but you know the United States has a pretty high level of existing home ownership. So for most people the rise in mortgage rates, if anything, gives you a little bit of shot and froida of like well, I bought 75 to 80% of people are locked in.
Speaker 4:Yeah, at a at a before rates went up, yeah, yeah, I mean.
Speaker 2:Or, alternatively, are enjoying their lower rates.
Speaker 4:Yeah, exactly, so I mean and that's also playing a role in the lack of turnover for the existing homes, because you have to have a big reason to move Right.
Speaker 2:Yes, but so I mean, I do think. I think the higher rates aren't always felt viscerally by every one, which I think is important for us to keep in mind.
Speaker 4:No, I agree, but it is seeping in like small business service. Oh, yes, 100% that reality started hitting me Like, oh, I was thinking about expanding, but, like I talked to the bank and it's going to be a lot more expensive, though Costco just reported this week and they said that the supply chains are back to normal, so that, yeah, it's huge, but also the demand is is weak and they're cutting prices and that's Costco. So there is a sign that prices actually are not just leveling up but, in certain goods, coming down.
Speaker 2:I will say, the one thing that I was holding onto for the entirety of the like route to inflation peak was the Costco hot dog. It was like if they had raised prices on the Costco hot dog. That's just time to give it up.
Speaker 4:Well, the founder of Costco, when he stepped down the second guy was thinking about raising the cost of the $5 rotisserie chicken and he told them he'd kill them.
Speaker 1:It's like when the dollar store is no longer a dollar right.
Speaker 1:I went to a talk by your former colleague, martha Jared Bernstein, who's now head of the CEA at the White House, and he I thought he really framed this very well and I hadn't quite heard it put this way before. And when she said the problem that he sees with sentiment is that people want their old prices back, remember what prices used to be, and they don't want to see and they know now that it's higher than they used to pay. And so he said the economy is experiencing disinflation, but consumers want to see outright deflation. Now. That's bad over the long term, but in the short term they haven't gotten to the place yet where they're resetting what the price of a Costco hot dog should cost.
Speaker 2:Yeah, no, and I do think that's hard and I do think you know, for a normal person, when you hear politicians talking about how we're going to fight inflation, you think that means that your prices are going to come back down.
Speaker 4:Yeah, exactly.
Speaker 2:And that's really not what we mean.
Speaker 4:Yeah, I think they made a mistake by calling it the Inflation Reduction Act. They should have called it an infrastructure spending, because, like that, people understand that and if you do this inflation reduction act and prices don't really come down like you get blamed for it.
Speaker 1:I see you using no comment on that, Martha.
Speaker 4:No, but because my point is it actually the uptake has been much bigger than even the CBO projected.
Speaker 2:It's we're building a lot of stuff. No, I mean, the uptake on the IRA has been amazing, yeah.
Speaker 4:Ironically, it's because of the permanent process. It's in a lot of red states, so I think they're going to have a. If the Republicans take over, they're going to have a. They're not going to be able to overturn this thing because it's actually really popular in the states. Yeah.
Speaker 1:Martha, I'm curious about your view on let's, let's, let's, let's, let's, let's, let's Put the shut down to the side for a minute. There are a lot of other we can. Let's just block it from our rands for a few seconds.
Speaker 4:I felt so bad. When I came in, one of the girls was saying that their boyfriend's coming next week and all the museums that are gonna go to and I was like oh no, no, buddy, no. So if you wanna see the pandas, you better get there today or tomorrow.
Speaker 2:Wait, when are the pandas going back though?
Speaker 4:To Sunday oh shoot, or Monday, but the panda Palooza ends this weekend, so they're on their way to China next week.
Speaker 1:Can they go if the government shut down?
Speaker 4:Yeah, chinese, chinese are still in their own plane.
Speaker 1:Don't worry about it, they're gonna get their pandas back.
Speaker 2:All right, the entire government shutdown is just a ploy to keep the pandas.
Speaker 3:They're gonna have to fly coach.
Speaker 1:Diplomacy. Okay, where was I going? This has been a really raucous episode of the Backer Cat. What I was gonna ask you?
Speaker 4:is Thermopylae. I'm not sure what you just said.
Speaker 1:I think at least there are other headwinds facing the consumer. We've talked a lot about the student loan repayments restarting. We also have talked about obviously there's still the auto workers strike going on. What's your view on the economic outlook going forward?
Speaker 2:I think my view is that I really wish that I knew that I was getting data over the next month.
Speaker 1:I mean.
Speaker 2:but really I mean we're at this point where we're kind of at least, I am really waiting to see whether or not it looks like we're gonna really land this plane or if things are gonna start looking a lot rockier. The path of disinflation has been smoother so far than a lot of people really anticipated. I'm not saying there haven't been bumps in the road, but it's been a much easier process than many people thought it would be. But you know, for your point, there are a lot of things that are kind of coming at the economy, high energy prices being one of them, the shutdown et cetera Soon loans.
Speaker 2:Soon loans.
Speaker 4:I still haven't decided how much of a difference I think that's gonna make, but yes, it is a thing that is For some people. You got a couple hundred dollars.
Speaker 2:Yeah, you know, I think one thing that came out yesterday because BEA did its Quinn Quinneal revisions of economic data very exciting day for some of us and it turned out that people have saved less than we thought they had.
Speaker 4:Yeah, but it's kind of a horrifying number. I'm really alive.
Speaker 1:Over what time period?
Speaker 2:Well, five years, five years. Yeah, honestly, I'm gonna say I think 1.1 or 1.3 trillion, I'm not sure what Quinn Quinneal meant.
Speaker 1:But now it's good to know. Five years, all right.
Speaker 4:She was a classic smasher yeah.
Speaker 2:See everyone who says that being a classics major gives you no useful skills for later in life. This episode is proving them wrong Exactly. But so you know. One thing that has been happening is people have been spending down savings and now it turns out that there was less to spend down than we thought. So I'm sort of interested to see what that looks like.
Speaker 1:And that would speak to some of the credit card data that we've seen, right that people are charging more on their credit cards. And they had pre-pand, not pre-pand, I think you've actually, I think, even higher than pre-pand, I'm like.
Speaker 2:Yeah, but you still have to scale that to like the increases in GDP. It's like I don't think the amount that's going onto credit cards at this moment is worrying. You know you get all these headlines. It's like more on credit cards than ever before and it's like yes, that's always true.
Speaker 4:That's always true.
Speaker 2:But it is something to keep watch on, obviously.
Speaker 1:Martha, what else is on your radar screen? That's a lot. Can you state anything else on your radar screen?
Speaker 4:Well, your radar screen's about to go black. Exactly I'm about to be flying totally blind.
Speaker 2:I'm gonna be sitting here desperately shifting through like state UI agency claims to see what happens.
Speaker 4:Yeah, you get the state data.
Speaker 2:Yeah, no, I mean not to be overly earnest for a second here, but I really am hoping that this gets resolved sooner rather than later. You know, this really does impact people's lives and it impacts the long-term functioning of the government, and it's avoidable, it's unnecessary, it's totally avoidable. And you know, it's very easy to get popcorn and watch people tear each other apart on national TV, but behind that is really a lot of people who are gonna be suffering over however long this lasts.
Speaker 1:Excellent, excellent point there, John and Brendan. Anything else that you guys wanna add?
Speaker 4:No, I mean next week was kind of a big US data week. The rest of the globe is that Australia's got an interest rate decision, but it's kind of a quiet week. So we were gonna really dig into the jobs number, which is a really big one, especially with all the Fed commentary, but I don't think we're gonna get it. No.
Speaker 3:Yeah, there was a lot of interest around this particular jobs number because we've seen this huge spike in the long-term treasury yields. 10-year yields have gone up really rapidly here.
Speaker 3:Yeah, at a time when the Fed is obviously talking about higher for longer and that's certainly one of the aspects that might be elevitating the longer end of the curve the markets finally like coming around to believe that the Fed has real credibility on that score. High gasoline prices. But economic data has been okay, but not maybe as kicky as in the past. Some with the headwinds building.
Speaker 3:It's been a little bit of a juxtaposition in the markets to see some of this off-landing and economic optimism ebbing to some extent when rates are doing this and then inevitably you're gonna cue the bond vigilante discussion and the focus on the budget deficits and so forth as the term premium. And if rates keep going up, even if you get a weaker jobs number, what does that say about the dynamics in the treasury market? So there was a little bit of intrigue on this front and we've obviously seen treasury yields calm down over the last couple of sessions, assisted by today's inflation data. That's helped stocks and so we'll maybe no news is good news next week, with all quiet on the data front and let treasuries sort of catch their breath after a pretty rocky quarter.
Speaker 1:But we'll see how long shutdown city lasts. But that does it for us at least for today. I'm Elan Mui with Penta. My co-hosts are Brendan and John from Markets Policy Partners. Former White House economist Martha Gimbal joined us as well from shutdown city. If you might be affected, please hang in there and remember you can always listen, like and subscribe to the macrocast wherever you get your podcasts. Thanks for listening. We'll see you next time.