Exploring Positive Economic Outlook and Migration Trends Amid Rising Unemployment | Weekly Business Briefs w/ Martin Perdomo

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Dare to imagine a future where American optimism shapes economic trends and impacts your financial decisions. Join us as we peel back the layers on the Federal Reserve Bank of New York's survey which reveals a positive outlook on the economy, despite the rising unemployment rate and looming recession fears. We dive into the intricacies of inflation expectations, consumer spending habits and the potential self-fulfilling prophecy that could ensue. Plus, we delve into the trends of middle-class migration, and why cities like Las Vegas, Phoenix, and San Antonio are becoming desirable destinations.

Keeping our fingers on the pulse of Wall Street, we take a look at its fluctuations following a recent rally and discuss the keen anticipation surrounding upcoming inflation data. Tune in for insightful perspectives on investor reaction and the potential implications for the Federal Reserve's decisions on interest rates. We don’t just discuss the trends, we also invite you to share your thoughts on how these economic shifts are influencing your financial decisions. So, get comfortable, put on your headphones and let's navigate these economic landscapes together. Prepare to be enlightened.

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Episode Transcript

Speaker 1 (00:00):
Most Americans think the economy should be in fairly
good shape this time next year.
Middle class movers are headingto these three cities in search
of affordability and WallStreet waivers.
After rally, focus on inflationdata.
These are the top threeheadlines in this week's weekly
business briefs.
First up, a majority ofAmericans hold an optimistic

(00:24):
outlook regarding the economiclandscape.
According to CNN Business, a newsurvey data released Monday by
the Federal Reserve Bank of NewYork showed that US consumers
believe inflation will continueto ease, the labor market will
remain strong and they willcontinue to spend more than they
did pre-pandemic.
The October survey of consumerexpectations printed a largely

(00:48):
more positive picture than theNew York Fed's survey a month
before, when the consumers wereas apprehensive of not making a
minimum debt payment as theywere in the early stages of the
COVID-19 pandemic.
In October, the averageperceived probability of missing
a minimum debt payment droppedto 11.99 percent, matching the

(01:11):
measurement in June and sittingwell within pre-pandemic ranges.
Consumer expectations forinflation one year and five
years from now both dropped 0.1percentage points from the month
before to land at 3.6 percentand 2.7 percent respectively.
However, median inflationexpectations at the three-year

(01:35):
horizon remained unchanged at 3percent a yearly high.
The Federal Reserve closelywatches consumers' inflation
expectations as they can be aself-fulfilling prophecy.
If consumers anticipate theprices will remain high, they
might spend more now and demandhigher wages, and businesses

(01:55):
might raise prices toaccommodate higher demand and
wages.
Lately, fed officials havegrown nervous about expectations
worsening.
On Friday, the University ofMichigan's closely watched
consumer survey showed sentimentwas warning about the current
economic state and thatinflation expectations ticked up

(02:16):
over the long run.
So it's interesting.
As unemployment is going up,guys, unemployment went from 3.4
percent to 3.9 percent and justas an economist general rule
when interest rates go up morethan half ofa percentage point
I'm sorry, not when interestrates, when the unemployment

(02:37):
rate goes up more than half of apercentage point the rule that
economists use and measure isthat a recession is either past
us or is right around the corner.
And we went.
We jumped from 3.4 percent to3.9 percent unemployment just
from September to October.

(02:58):
So we'll have to wait and see.
What the future tells us isjust again.
I've been saying we're in aweird space, but I agree that it
is a self-fulfilling prophecy.
When it comes to consumersentiments and the market
sentiments, like I always say,the market is very sentimental
and emotional.
Next up.
Middle-class movers arechoosing Las Vegas, phoenix and

(03:22):
San Antonio as top destinations.
Reported by the insider,middle-class Americans are
increasingly moving out of thestate to achieve an affordable
lifestyle.
They're heading into cities inArizona, nevada, florida and
Texas.
Florida Florida is expensive,so that's interesting.
Florida is not affordable thesedays.

(03:42):
According to a new H&R Blockreport, using 2020 tax data, the
most surprising location on thelist is Sin City.
It was the second most populardestination for middle class
movers coming from out of stateand the reported state said
excuse me, a Realtor on theground said it's an open secret

(04:04):
that Las Vegas is an up andcoming destination for movers
seeking affordable homes and lowtaxes.
It's weird to say this out loud, but I feel like Las Vegas is
the new Colorado.
The registered agent, andrewAreveallo, who is licensed in
Nevada, colorado, told theinsider it has shifted from
Denver, getting a lot of peoplefrom out of town, to Vegas.

(04:25):
It's now officially taken over.
H&r Block defined middle classAmericans as those with an
adjusted median household incomebetween $45,000 and $145,000.
That's a big spread.
That is a really big spreadBetween $45,000 and $145,000,
that's really weird.

(04:46):
Based on Pew Research Centerguidelines and use anonymized
data from the 4.6 million peoplewho filed taxes with them in
that income bracket.
That's a really big spread.
Interesting article.
Lastly, wall Street displaysfluctuations following a recent

(05:08):
rally, with attention nowpivoting towards forthcoming
inflation data.
According to Rutter, the mainUS stock indexes were mixed on
Monday as investors awaited acrucial inflation reading this
week that could shapeexpectations around how long the
Federal Reserve will keepinterest rates elevated.
That's a big problem right now.

(05:30):
Interest rates.
The cautious mood followed astrong session on Wall Street on
Friday when a rally in mega-gapstocks lifted the tech-heavy
NASDAQ to a two-month peak andbenchmark S&P 500 to a near
eight-week closing high.
Wow, investors will focus onthe slew of economic data and

(05:51):
speeches from Fed officials thisweek for clues on trajectory of
US interest rates, amid growingexpectations that the Fed has
done hiking borrowing costs.
Given the healthy state ofretail earnings that we have
this week, along with the CPIdata that's coming out this week

(06:12):
as well, there's clearly riskto rally strength, and quote the
major US stocks indexes hasrebounded strongly this month,
fueled by a stronger thanexpected earnings season.
In hopes that US interest ratesare near their peak, investors
have priced in a nearly 86%chance that the Fed will hold

(06:33):
interest rates in December,according to CME Group's Fed
Watch Tool.
So interesting.
I'm hoping that they hold andthey don't spike again.
And this has been your weeklymarket update.
What are your thoughts onAmericans thinking on this
research that was done, withAmericans thinking that

(06:54):
inflation is going to be betterand that they're spending more
than they did before?
Do you think that's reasonable?
What are you doing?
Are you spending more?
Are you spending less?
What are you seeing in theeconomy?
Are you seeing the effects ofthis half of a percent go up on
unemployment or not?
Let me know your thoughts asdiscussed in the chat or drop

(07:18):
your thoughts here.
Let me know what you think.
Appreciate you guys.