September 5, 2025 • 10 mins
Tune in here to this Friday edition of The Brett Winterble Show!
We're joined by Phil Kerpen from American Commitment to talk about the state of the U.S. economy and the growing instability within the Federal Reserve. Kerpen breaks down the latest jobs report, calling it weak and riddled with major downward revisions that undermine confidence in the Bureau of Labor Statistics. He highlights declining federal employment and the upcoming removal of deferred-resignation employees as economic positives. Kerpen also slams the Fed under Jerome Powell, citing lavish spending, internal dysfunction, and chronic failure to meet inflation targets. Looking ahead, he predicts a likely rate cut, though warns that without federal spending cuts, long-term interest rates like mortgages won’t fall. The conversation ends with a sharp take on AI’s impact on entry-level tech jobs and advice for young people to pursue trades that are less vulnerable to automation. For more, visit https://www.americancommitment.org/
Listen here for all of this and more on The Brett Winterble Show!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:11):
News Talk eleven nine three WBT. It's the Brett Winterble Show,
and I'm happy to welcome back to the program. Phil Kirpin,
President of American Commitment. You can get more information at
Americancommitment dot org. It's pleasure to have you on the
show today, sir, Thanks so much for being here.
Speaker 2 (00:28):
Hey, my pleasure.
Speaker 1 (00:29):
I wanted to take a look at the economy such
as it is and get a sense from you what
we're seeing. Got some numbers coming out this afternoon, but
I'm just curious in your perspective, how are you sensing
that the economy is going here?
Speaker 2 (00:50):
Well, this is a very week jobs report. On top
of we now have two week jobs reports in a
row with some substantial downward revisions as well. And just
the size of these revisions is really large, which I
think calls into question the you know, the whole value
of the employment statistics. Unfortunately. So I think President Trump
was right that we need we need to fix the
(01:12):
Bureau of Labor statistics. So they put out numbers that
you know, don't jump up and down all over the
place in the revisions, but have more value of the
day they're released. And so yeah, it's a bad report,
but I don't know quite how much stock we should
put in it. Just because we're seeing such big revisions,
you have to wonder about the data quality. There are
some silver linings in this job's report. In particular, employment
(01:35):
is down, and that's good because you know, that's the
weight that the rest of us have to carry with
our taxes. So federal employment being down is a positive
in my view. And we're going to see a big,
big decrease in federal employment one month from now because
remember all those deferred resignation agreements that went in where oh, yeah,
you know, you don't have to do anything for the
(01:55):
next eight months. We're going to pay you through the
end of September to leave. Well, they're finally going to
be off the payroll. At the end of this month,
allo is going to be we're going to be down
about three hundred thousand federal employees that'll be off the payroll.
So we've got a pretty significant accomplishment, I think, on
that side of things. But you know, there's a little
bit of weakness in the economy. We got a you know,
GDP second quarter was pretty good. It was actually three
(02:16):
point three percent, But there's some undercurrents. We've seen a
lot of corporate layoffs. We've got now you know, a
bunch of these week jobs reports, although as I said,
we don't quite know how reliable they are. We've got
a lot of uncertainty related to the tariffs, and a
lot of uncertainty on the trade fund in general. But
we have some good news on the economy too. They
cleared the tax bill in Congress, not in December, but
(02:39):
in the beginning of July, which I think was a
huge relief. We're seeing capital expenditures rise, which is say,
companies are spending more on equipment and software facilities upgrades.
That all means that you know, workers will be more
productive and they can earn more, and so that's very positive.
And you know, if you look, you know, the other
good news in the report they came out today from
(03:00):
you know, the job support is weekly earnings are rising
in real terms again with just to say, the amount
that people are taking home and their paycheck is rising
faster than prices are rising, which of course is the
opposite of what was happening under the Biden administration. So
people can afford a little bit more at the end
of every month instead of a little bit less, and
so the hope is that that kind of translates psychologically
(03:22):
into you know, better feelings about the economy and things rebound.
But it's you know, it's not great, it's not bad.
There's sort of there's some positives and some negatives, is
how I see it right now.
Speaker 1 (03:31):
So let me ask you one of the things that's
obviously front of mind whether or not we're going to
see a cut in the in the rates, because the
President has been you know, he's been jaw boning, he's
been going after Powell and and that sort of stuff.
And I think with good reason. I mean, I think
he's he's he waited way too long to cut the rates.
(03:55):
Tell me also, though, about the chaos that seems to
be emerging inside the FED, Like what is happening there, Phil,
It's a very weird kind of a thing. We got
people who have houses that they don't live in, or
maybe they live in a go ahead.
Speaker 2 (04:12):
The FED is supposed to be one of our most
hallowed institutions, and it's really been a bit of a
clown show under Jerome Powell. And you know, they they're
spending over three billion dollars on facilities upgrades they're building.
You know, they call the taj Mahal on Constitution Avenue,
these crazy upgrades and by the way, they already had
like the nicest building in town, so I don't even
(04:33):
know what it's going to look like over there. After
they spend three billion dollars on upgrades, and of course
they've got these big cost overruns, and so he's been
sort of focused on his palatial headquarters. And meanwhile, you know,
we've got Lisa Cook who almost certainly committed more DEE fraud.
I mean, everyone's in the sit until they're proven guilty.
But you know, it's one thing. You know a lot
(04:54):
of people, and you know this is how they now
their strategies to say, oh, well, thether people in the
Trump administration they get the same thing. And it's like, well,
it's kind of normal. If you buy a house and then,
you know, five ten years later, you buy another house
and you decide to turn your old one into a rental.
You don't necessarily go to your mortgage lender and say
I need to you to rewrite my mortgage because it's
(05:15):
not owner occupied anymore. That everyone kind of understands how
that can happen. Sure it's very different to sign two
mortgage documents within two weeks of each other and say
on both of them that it's a primary residence. There
is an intent there that I think is a huge
problem for her. You can't do that accidentally less than
two weeks apart. That's her big problem and why I
(05:35):
think you know, she's got criminal exposure. Frankly, although you
know they're trying to turn her into you know, some
kind of a martyr. Yes, writing court and she hired
Abbey Lowell and all of that, but here's the thing.
You know, you set all that aside and the crazy headquarters,
and Jerome Powell has told us what his goal is, right,
he says, we're going to be within two percent. We're
(05:56):
you know where. He says, basically, we're going to be
between one point eight percent and two point two percent
that inflation. We're going to be in this narrow symmetrical
band around two percent. That's our goal. Everything we do
is designed to accomplish that. But he's never accomplished it.
The whole time he's been there. I mean, he's been there.
You know, he's been there now, you know, whatever it is,
five six years. I think he's had three months ever
where he was in his target range. So if a
(06:18):
guy's batting, you know, three for seventy five or three
for eighty, whatever it is, by his own standard that
he says he wants to be judged by. I think
you'd call that a failure. Yeah. I think probably would
be cause for removal too, even though the President so
he doesn't want to have that legal fight at the moment,
and Palell's going to be gone May fifteenth. His term
as chairman at least is up. He might try to
stay as a governor, but usually when someone's term as
(06:41):
chairman is up, they leave the board completely. So we're
going to see a lot of change at the FED
next year. And I do think we're going to see
a rate cut this month. I think Powell sort of
telegraphs that, and everyone's been expecting all year that they
would cut in September. So I do think we'll see that.
And I do think that they've been generally they've been
too high, although you know, inflation has not been conquered
because one of the problems we've got is and you know,
(07:02):
I give the President a lot of leeway on tariffs
because I know it's about foreign policy objectives, grant strategy,
and a lot of things beyond just the economics, and
he actually has accomplished a lot of things with them.
But you know, some of the tariffs, you see them
flow right through in higher prices. Like you know, he
puts fifty percent tariff on Brazil coffee is ten percent
more expensive, fifteen whatever it is, because that's where we
get most of the coffee. So there's a lot of
(07:23):
things like that that are putting some upward pressure on prices.
But I do think that the economy could certainly use
the short term boost of you know, money being less expensive,
more readily available, lower interest rates for businesses to expand
and hire more people. I think that would be a
big positive. Is the ones I've been cautioning people though,
(07:44):
and I think this is so important, just because the
FED cuts their target for the overnight lending rate between banks,
and that's what they've fed funds rate is it's the
shortest of short term rates. That doesn't mean the tenure
treasury is going to go down automatically. It doesn't mean
the thirty your mortgage is going to go down automatically.
They cut those rates last year to try to help
Biden get reelected, and the mortgage rates actually went up,
(08:06):
not down. And that's because the tenure Treasury and the
mortgage rate has a lot to do with market expectations
for inflation in the long term, and a lot of
that's driven by government spending. And if you want the
tenure Treasury interest rate to come down, you want thirty
year mortgages to come down so people can afford for
buy homes for the first time. The people you need
to complain through is not really the Fed, it's Congress.
(08:26):
They've got to cut spending. We don't change the outlook
on federal spending. Nobody's going to believe that we're not
going to have chronic high inflation, you know, and so
the interest rates are not going to come down. That's
the fundamental problem with.
Speaker 1 (08:38):
Huge, hugely important. I have one question for you that
that kind of flew in here from a listener named Mark,
and it's this, in our last couple of minutes here,
how many jobs were lost because of AI? Is AI
a factor? Yet? What are you seeing?
Speaker 2 (08:59):
You know? I think I do think it's a factor,
and I think where we're particularly seeing it is a
lot of the a lot of the it companies a
lot of the software engineering that kind of thing. You're
just I just saw a chart on this that was amazing.
But basically, the number of junior engineering positions has gone
down a lot, and so the senior positions are still there,
but now instead of having a bunch of young college
(09:19):
grads working under them, they do it with software, they
do it with AI, they do it with tools. And
so you know, from the from from one perspective, that's
good because it means you're being more productive. You can
you know, you could pay that person more now because
they're using software instead of having to have a whole
bunch of people, a whole team of people. But it
also means, you know, young people coming up, they got
to think very hard about what kind of career they
go into because you know, for the last twenty years,
(09:41):
everyone tells their kids they'll get a computer science degree,
you're guaranteed to get a job. Now you've got a
lot of computer science graduates that can't get jobs because
they I replace those entry level jobs and sewing on.
I tell a lot of young people, you know, do
something it's going to be real hard for a robot
to do. Learn it to be an HVAC tag or
an electrician or something where you have a real skill
in trade that you know, maybe someday a robot can
do it, but that one's very far off.
Speaker 1 (10:03):
Great stuff. Phil Kirpin, President of American Commitment. I love
the conversation. Follow follow him over at Americancommitment dot org.
Americancommitment dot org. Thanks so much. Enjoy the weekend, my friend.
Speaker 2 (10:15):
All right, Brad, have a good one.
Speaker 1 (10:16):
You got it.
News Talk eleven nine three WBT. It's the Brett Winterble Show,
and I'm happy to welcome back to the program. Phil Kirpin,
President of American Commitment. You can get more information at
Americancommitment dot org. It's pleasure to have you on the
show today, sir, Thanks so much for being here.
Speaker 2 (00:28):
Hey, my pleasure.
Speaker 1 (00:29):
I wanted to take a look at the economy such
as it is and get a sense from you what
we're seeing. Got some numbers coming out this afternoon, but
I'm just curious in your perspective, how are you sensing
that the economy is going here?
Speaker 2 (00:50):
Well, this is a very week jobs report. On top
of we now have two week jobs reports in a
row with some substantial downward revisions as well. And just
the size of these revisions is really large, which I
think calls into question the you know, the whole value
of the employment statistics. Unfortunately. So I think President Trump
was right that we need we need to fix the
(01:12):
Bureau of Labor statistics. So they put out numbers that
you know, don't jump up and down all over the
place in the revisions, but have more value of the
day they're released. And so yeah, it's a bad report,
but I don't know quite how much stock we should
put in it. Just because we're seeing such big revisions,
you have to wonder about the data quality. There are
some silver linings in this job's report. In particular, employment
(01:35):
is down, and that's good because you know, that's the
weight that the rest of us have to carry with
our taxes. So federal employment being down is a positive
in my view. And we're going to see a big,
big decrease in federal employment one month from now because
remember all those deferred resignation agreements that went in where oh, yeah,
you know, you don't have to do anything for the
(01:55):
next eight months. We're going to pay you through the
end of September to leave. Well, they're finally going to
be off the payroll. At the end of this month,
allo is going to be we're going to be down
about three hundred thousand federal employees that'll be off the payroll.
So we've got a pretty significant accomplishment, I think, on
that side of things. But you know, there's a little
bit of weakness in the economy. We got a you know,
GDP second quarter was pretty good. It was actually three
(02:16):
point three percent, But there's some undercurrents. We've seen a
lot of corporate layoffs. We've got now you know, a
bunch of these week jobs reports, although as I said,
we don't quite know how reliable they are. We've got
a lot of uncertainty related to the tariffs, and a
lot of uncertainty on the trade fund in general. But
we have some good news on the economy too. They
cleared the tax bill in Congress, not in December, but
(02:39):
in the beginning of July, which I think was a
huge relief. We're seeing capital expenditures rise, which is say,
companies are spending more on equipment and software facilities upgrades.
That all means that you know, workers will be more
productive and they can earn more, and so that's very positive.
And you know, if you look, you know, the other
good news in the report they came out today from
(03:00):
you know, the job support is weekly earnings are rising
in real terms again with just to say, the amount
that people are taking home and their paycheck is rising
faster than prices are rising, which of course is the
opposite of what was happening under the Biden administration. So
people can afford a little bit more at the end
of every month instead of a little bit less, and
so the hope is that that kind of translates psychologically
(03:22):
into you know, better feelings about the economy and things rebound.
But it's you know, it's not great, it's not bad.
There's sort of there's some positives and some negatives, is
how I see it right now.
Speaker 1 (03:31):
So let me ask you one of the things that's
obviously front of mind whether or not we're going to
see a cut in the in the rates, because the
President has been you know, he's been jaw boning, he's
been going after Powell and and that sort of stuff.
And I think with good reason. I mean, I think
he's he's he waited way too long to cut the rates.
(03:55):
Tell me also, though, about the chaos that seems to
be emerging inside the FED, Like what is happening there, Phil,
It's a very weird kind of a thing. We got
people who have houses that they don't live in, or
maybe they live in a go ahead.
Speaker 2 (04:12):
The FED is supposed to be one of our most
hallowed institutions, and it's really been a bit of a
clown show under Jerome Powell. And you know, they they're
spending over three billion dollars on facilities upgrades they're building.
You know, they call the taj Mahal on Constitution Avenue,
these crazy upgrades and by the way, they already had
like the nicest building in town, so I don't even
(04:33):
know what it's going to look like over there. After
they spend three billion dollars on upgrades, and of course
they've got these big cost overruns, and so he's been
sort of focused on his palatial headquarters. And meanwhile, you know,
we've got Lisa Cook who almost certainly committed more DEE fraud.
I mean, everyone's in the sit until they're proven guilty.
But you know, it's one thing. You know a lot
(04:54):
of people, and you know this is how they now
their strategies to say, oh, well, thether people in the
Trump administration they get the same thing. And it's like, well,
it's kind of normal. If you buy a house and then,
you know, five ten years later, you buy another house
and you decide to turn your old one into a rental.
You don't necessarily go to your mortgage lender and say
I need to you to rewrite my mortgage because it's
(05:15):
not owner occupied anymore. That everyone kind of understands how
that can happen. Sure it's very different to sign two
mortgage documents within two weeks of each other and say
on both of them that it's a primary residence. There
is an intent there that I think is a huge
problem for her. You can't do that accidentally less than
two weeks apart. That's her big problem and why I
(05:35):
think you know, she's got criminal exposure. Frankly, although you
know they're trying to turn her into you know, some
kind of a martyr. Yes, writing court and she hired
Abbey Lowell and all of that, but here's the thing.
You know, you set all that aside and the crazy headquarters,
and Jerome Powell has told us what his goal is, right,
he says, we're going to be within two percent. We're
(05:56):
you know where. He says, basically, we're going to be
between one point eight percent and two point two percent
that inflation. We're going to be in this narrow symmetrical
band around two percent. That's our goal. Everything we do
is designed to accomplish that. But he's never accomplished it.
The whole time he's been there. I mean, he's been there.
You know, he's been there now, you know, whatever it is,
five six years. I think he's had three months ever
where he was in his target range. So if a
(06:18):
guy's batting, you know, three for seventy five or three
for eighty, whatever it is, by his own standard that
he says he wants to be judged by. I think
you'd call that a failure. Yeah. I think probably would
be cause for removal too, even though the President so
he doesn't want to have that legal fight at the moment,
and Palell's going to be gone May fifteenth. His term
as chairman at least is up. He might try to
stay as a governor, but usually when someone's term as
(06:41):
chairman is up, they leave the board completely. So we're
going to see a lot of change at the FED
next year. And I do think we're going to see
a rate cut this month. I think Powell sort of
telegraphs that, and everyone's been expecting all year that they
would cut in September. So I do think we'll see that.
And I do think that they've been generally they've been
too high, although you know, inflation has not been conquered
because one of the problems we've got is and you know,
(07:02):
I give the President a lot of leeway on tariffs
because I know it's about foreign policy objectives, grant strategy,
and a lot of things beyond just the economics, and
he actually has accomplished a lot of things with them.
But you know, some of the tariffs, you see them
flow right through in higher prices. Like you know, he
puts fifty percent tariff on Brazil coffee is ten percent
more expensive, fifteen whatever it is, because that's where we
get most of the coffee. So there's a lot of
(07:23):
things like that that are putting some upward pressure on prices.
But I do think that the economy could certainly use
the short term boost of you know, money being less expensive,
more readily available, lower interest rates for businesses to expand
and hire more people. I think that would be a
big positive. Is the ones I've been cautioning people though,
(07:44):
and I think this is so important, just because the
FED cuts their target for the overnight lending rate between banks,
and that's what they've fed funds rate is it's the
shortest of short term rates. That doesn't mean the tenure
treasury is going to go down automatically. It doesn't mean
the thirty your mortgage is going to go down automatically.
They cut those rates last year to try to help
Biden get reelected, and the mortgage rates actually went up,
(08:06):
not down. And that's because the tenure Treasury and the
mortgage rate has a lot to do with market expectations
for inflation in the long term, and a lot of
that's driven by government spending. And if you want the
tenure Treasury interest rate to come down, you want thirty
year mortgages to come down so people can afford for
buy homes for the first time. The people you need
to complain through is not really the Fed, it's Congress.
(08:26):
They've got to cut spending. We don't change the outlook
on federal spending. Nobody's going to believe that we're not
going to have chronic high inflation, you know, and so
the interest rates are not going to come down. That's
the fundamental problem with.
Speaker 1 (08:38):
Huge, hugely important. I have one question for you that
that kind of flew in here from a listener named Mark,
and it's this, in our last couple of minutes here,
how many jobs were lost because of AI? Is AI
a factor? Yet? What are you seeing?
Speaker 2 (08:59):
You know? I think I do think it's a factor,
and I think where we're particularly seeing it is a
lot of the a lot of the it companies a
lot of the software engineering that kind of thing. You're
just I just saw a chart on this that was amazing.
But basically, the number of junior engineering positions has gone
down a lot, and so the senior positions are still there,
but now instead of having a bunch of young college
(09:19):
grads working under them, they do it with software, they
do it with AI, they do it with tools. And
so you know, from the from from one perspective, that's
good because it means you're being more productive. You can
you know, you could pay that person more now because
they're using software instead of having to have a whole
bunch of people, a whole team of people. But it
also means, you know, young people coming up, they got
to think very hard about what kind of career they
go into because you know, for the last twenty years,
(09:41):
everyone tells their kids they'll get a computer science degree,
you're guaranteed to get a job. Now you've got a
lot of computer science graduates that can't get jobs because
they I replace those entry level jobs and sewing on.
I tell a lot of young people, you know, do
something it's going to be real hard for a robot
to do. Learn it to be an HVAC tag or
an electrician or something where you have a real skill
in trade that you know, maybe someday a robot can
do it, but that one's very far off.
Speaker 1 (10:03):
Great stuff. Phil Kirpin, President of American Commitment. I love
the conversation. Follow follow him over at Americancommitment dot org.
Americancommitment dot org. Thanks so much. Enjoy the weekend, my friend.
Speaker 2 (10:15):
All right, Brad, have a good one.
Speaker 1 (10:16):
You got it.
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