December 3, 2024 • 38 mins
Mike Armstrong and Paul Lane discuss the dollar dipping as traders refocus on the Fed's path. More workers are feeling stuck in their job. Can New York City lead the way for a US housing rebound? Is the Social Security Fairness Act irresponsible? Are you in need of Porch Pirate Protection?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is The Financial
Exchange with Mike Armstrong and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAV five Boston and making a donation today.
The DAV five K Boston is presented by Veterans Development Corporation.
(01:07):
Face is the Financial Exchange with Mike Armstrong and Paul Lane.
Speaker 2 (01:13):
Good morning, Welcome back to the Financial Exchange. It's a
Jobs Tuesday here on the Financial Exchange. We'll get the
big Jobs report on Friday of this week, but this
morning at ten am, just six minutes ago, we did
receive the Joltz Report. That's the job Opening's labor turnover
survey that we get monthly, so we'll be diving in there.
(01:34):
And that's all ahead of the Federal Reserve meeting which
is coming up on the eighteenth of December, with some
board members commenting on the potential direction of interest rates
as we go there. It's Mike Armstrong and Paul Lane
and Tucker Silva with you on this Tuesday morning where
we open up with markets mixed again for the second
day in the row, SMP flat, NAZAC up slightly, Dow
(01:56):
down slightly, and let's jump right in, Paul to the
upcoming Federal Reserve meeting, because that's where eyes are finally
starting to return to right. We've had I think November
was the month of Trump presidency digestion, and everyone the
only thing they wanted to talk about was how is
(02:16):
it going to work, tariffs, taxes, regulation, what's going to happen,
you know, is capital one going to be allowed to
buy discover financial what's going to happen with the banking sector,
what's going to happen with electric vehicles, and everything in between.
That will all continue, but I think a lot of
those trades have now played out and it's back to
the fundamentals of what's the Fed going to do, what's
(02:37):
the job market looking like, what's inflation looking like?
Speaker 3 (02:40):
And that's normal, healthy and a good thing.
Speaker 2 (02:44):
We don't need to spend all of our time trying
to figure out what laws Donald Trump's presidency and Congress
is going to pass under him.
Speaker 4 (02:51):
There's only so many times you can go through a
segment and say, we'll see, you know, how this plays out,
or we'll wait for further details. And we really exhausted that.
We you know, the collective financial commentary industry exhausted that
as much as possible. And there's that significant period where
it's about what's a two months to the day from
the election results to inauguration, where you just have a
(03:14):
lot of time to kill and sort of banter about policies.
So it's nice to see on the financial presses that
we read and digest so consistently that the topic has
skewed back to kind of normal month to month affairs
of jobs reports, inflation, and FED meetings. Those are kind
of the crux of the economy that we're focused on
right now.
Speaker 2 (03:33):
So let's jump right in there on the Federal Reserve piece,
because there's a few pieces out there this morning, but
a few different ways of looking at guesses and bets
and insinuations about the Federal Reserve's next moves are indicating
another rate cut come December. You've got the dollar dipping
a bit after surging on again some of that Trump
(03:55):
trade rhetoric on tariffs and things along those lines. You've
got money markets betting on a cut. What is the
Chicago Mercantile Exchange looking like? Now? This is where we
source data on how bets are being placed at the
CME on what the Feds to do next fall.
Speaker 4 (04:11):
So where we've sat here from September is about seventy
five basis points of cuts have gone on thus far
from where we began earlier in the fall. Looking at
the most upcoming meeting, which will be December eighteenth, There
now is a seventy four percent probability, according to the
CME Group, that the Fed will cut by another twenty
five basis points, making it a full percentage cut. From
(04:33):
the beginning of September when they endeavored down this rate
cutting cycle. That percentage was as low as fifty five
percent on Monday, So that has ticked up a little
bit here, largely off the backs of commentary from the
Fed's Governor, Christopher wall In which we'll get into in
a moment here, But it does seem like all indications
at this point indicate that there is going to be
(04:54):
a cut for this upcoming meet in December. Now, if
you go out a little further on the meeting count unders,
when you scrutinize January or March of twenty twenty five
those meetings, it's less clear that there will be continued
cuts at this pace that we've seen, you know, since
the beginning of September.
Speaker 2 (05:12):
Here, Yeah, I think the main narrative to understand about
interest rates since the election is that there has been
a change in assumptions pretty significantly. Sorry, I need to
think that through a little bit, but change in assumptions
pretty significantly towards the upside on growth and potential upside
on inflation. That's been the if you read through the
(05:34):
real Trump trade, as we've talked about it here. Equity
markets have obviously surged a good five to six percent
since the election, but interest rates have two. And so
if you're trying to read the tea leaves here, what
investors seem to be digesting and assuming is that a
Trump administration compared to a Harris administration means lower taxes,
less regulation, more growth. I think for the economy, that's
(05:55):
what you need to take away. And with those factors
higher tariffs, high growth, less regulation, lower taxes, you have
that possibility of higher inflation. And so when we look
across the board right, whether you're looking at January February
rate cuts, where we're fast forwarding all the way out
to June of next year, the probability that rates are
substantially lower than they are now has decreased. It is
(06:21):
less probable that rates are coming down substantially over the
next six to nine months as that was priced in
for say a Biden two point zero administration through a
potential Harris. So that's where things stand from the federal
Reserve's perspective, probably not going to change their path in December,
because quite honestly, the water is pretty muddy right now.
(06:42):
You've had the hurricanes that disrupted the October jobs report.
I expect on Friday, when we receive the November jobs
report that you'll see some snap back in job creation
come November, just you know, returning to a more normal
degree of all of that. For a frame of reference, here,
in the month of September, you saw two hundred and
(07:03):
twenty three thousand jobs created. In the month of October,
you saw only twelve thousand net jobs created. We've been
running averages probably in the one hundred and fifty to
two hundred thousand range over the course of this year,
and so obviously the October report was abysmal and was
pretty easily explained by hurricanes. But frankly, if you saw
(07:24):
a snapback of three hundred thousand jobs created in November,
I don't think the FED would even look at that
and say, oh, watch out, we're heading for inflation.
Speaker 3 (07:30):
They would probably just look at that and say, well,
this could.
Speaker 2 (07:33):
Be a serge in demand for labor, or it could
just be that those jobs that didn't get filled because
of hurricanes in October are getting filled in November, and
so let's not do anything about it.
Speaker 4 (07:45):
Right. You had that, plus you had the machine of
strike at Boweling that contributed to those numbers from the
October report as well. So there was a couple different
factors in play there. You have a labor market which
we continue to sort of scrutinize the sea where it's sits.
And then you also have though an economy in general
from a GDP perspective, that has been growing really strongly.
(08:06):
We came in at Q three GDP growth of two
point eight percent, and so when you look at the
Federal Reserve and some of these concerns that Mike was
alluding to, this idea that perhaps this inflation could stoke
up or the idea of just consistent rate cuts marching
on through twenty twenty five.
Speaker 3 (08:23):
Has been paused.
Speaker 4 (08:25):
Is because you have a strong economy growing at two
point eight percent for the third quarter. Consumer spending has
been there. If you look at the GDP numbers, the
only argument or caveat is continues to be that labor market,
really where does it sit? And it seems like we're
going to come out of the jobs report on Friday. Likely,
I'm sure, Mike, because you're gonna have one absolute disastrous
(08:46):
month of data that was easily explainable, and then to
your point, we could have another month from the month
of November that could look tremendous, but it could be
all that muddying just because of the hurricanes and those
one off impacts that we talked about.
Speaker 2 (08:59):
Taking a look at it market interest rates, We've got
the yield on the ten year Treasury sitting at four
point one eight six percent today, largely flat. Awaiting again
more of this economic data as well as commentary from
Federal Reserve speeches today. The yield on the thirty year
fixed rate mortgage, according to Mortgage News Daily as of yesterday,
sitting at six point nine one percent. That's up from
(09:21):
a recent.
Speaker 3 (09:22):
Low of.
Speaker 4 (09:26):
Six point one.
Speaker 2 (09:27):
Six one six one five somewhere in that range back
in September. The average rate according to Bank Rate for
auto loans, the average auto loan interest rate for new
cars in the second quarter of twenty four was sitting
at six point eight four percent. Keep in mind that
was second quarter of twenty four, so this data is
a little bit outdated at this point and on used
(09:51):
cars right now. If you have the highest credit the
average indust rates sitting at seven point three percent, those
very into the high teens in low twenties.
Speaker 3 (10:01):
If you are below.
Speaker 2 (10:02):
Average credit scores, let's take a quick break. When we
come back, want to dive into this new Joltz report
as well as this recent survey was the done of
twenty thousand US workers and their satisfaction on the job.
Will be covering the labor market next.
Speaker 1 (10:19):
This is your home for the most comprehensive coverage of
the economy and the trends on Wall Street. Face is
the Financial Exchange Radio Network. The Financial Exchange streams live
on YouTube. Like our page and stay up to date
on breaking business news all morning long. Face is the
Financial Exchange Radio Network.
Speaker 5 (10:43):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
Speaker 3 (10:49):
The US Virgin.
Speaker 5 (10:49):
Islands are Saint Croix, Saint Thomas, and Saint John. With
winter on the horizon, now's the time to start looking
at a fabulous holiday vacation and there's no better place
than the US Virgin Island. Enjoy perfect weather, world class dining,
incredible beaches and a vibrant nightlife. No passport is needed,
and there's no money to exchange. Take your next vacation
in America's Caribbean paradise the United States Virgin Islands. Go
(11:13):
to visit USVII dot com to book your trip. That's
visit USVII dot com.
Speaker 2 (11:18):
Paul, I want to talk a little bit about the
state of the labor market right now, because according to
the Wall Street Journal Journal, a recent study that was
done by Gallup showed that more than half of the
twenty thousand US workers whom they surveyed in November said
they were watching for or actively seeking a new job.
That is the largest share since twenty fifteen. And mark's
(11:42):
a pretty significant change compared to where we were with
this labor market over the last few years. And I
actually think that this makes a lot of sense in
terms of how people are responding to surveys, because the
way that I would describe this labor market right now
is healthy but stagnant. I think that's kind of how
(12:07):
I would describe it as you're not seeing a big
spike in unemployment, you're not seeing big layoffs, but you're
also not seeing much churn in terms of the labor market.
We talked about a report that came out at ten
am this morning, the Job Openings Labor Turnover Survey. It
does exactly that. It tries to indicate to you how
much churn is there in the labor market, how quickly
(12:29):
are people finding new jobs, separating from service quitting, getting hired,
those types of statistics. It is also pretty useful for
determining some degree of the tightness of the labor market.
Right when we talk about that ratio from a few
years ago where there were two jobs open for every
one person looking for work. We get that from the
JOLT survey too. But what I'm kind of concluding here is,
(12:51):
so naming the numbers here, the job openings, we're sitting
at seven point seven million. That was unchanged from the
previous month. Hires changed very little, sitting at five point
three million. Separations was a little changed at also five
point three million. Quits rate three point three million. It increased,
but layoffs and discharges didn't really move.
Speaker 3 (13:13):
And you know, an important measure.
Speaker 2 (13:15):
That I like to look at is the rate at
which people are leaving their job. So total separations as
a percentage of the overall labor force was sitting at
three point three percent, and it was the third month
in a row where the total separations rate was sitting
at three point three percent. And for some context here
(13:36):
in twenty twenty one and twenty twenty two, when we
talk about those really hot labor markets, you were sitting
at you know, three nine to four two. So we're
not talking about like fifteen percent separations rate, but a
move of that magnitude is significantly higher. If you go back,
and this is the comparison that we've been making a
lot about the labor market of the last few months,
(13:58):
if you go back to the twenty tens and try
and find that similar labor market in terms of rate
of separations, you're looking at twenty fourteen to twenty fifteen levels,
which is the same thing as the ratio of unemployed
to job openings. It's a number of these things where
we're looking at and saying, hey, this economy is looking
and feeling much more like the mid twenty tens, which
(14:22):
for stock market investors wasn't a bad period of time,
but for people looking for work and looking for raises
and trying to get ahead in the labor market wasn't great, right,
It was a challenging labor market, and so that's kind
of where I'm landing with this is I'm not surprised
that more than half of people are looking for a
new job, and I'm not surprised that probably a lot
of them are struggling to find that new job.
Speaker 4 (14:41):
Yeah, it does seem like there is this real sort
of stasis in the labor market where the employers are
really trying to retain employees because it's the cheapest way
to do things. We've seen all sorts of business shocks
of the course of the last three or four years,
so there's this hesitancy from employers to layoff employees in
case there is a surgeon demand. They want to make
sure that they have the applicable staffing in place to
(15:04):
meet that. And then on the employee side of things,
you have employees who've been battling inflation and also a
focus on a lot of their by their a lot
of their employers to not over extend budgets. So it
just has been sort of this keep things pat and
not make any changes, and that's reflected by the quits
right there. Some of the details as to why people
(15:29):
are feeling more stuck on the job in this piece
in the Wall Street Journal, mic, I don't know how
much they contribute. They're saying, you know, more meetings, the
messaging and things like that are leading people to feel
like they're overwhelmed and burnout. To me, I don't really
understand how the labor dynamics have shifted that dramatically post
twenty twenty. All of this stuff with meetings and messaging,
(15:52):
I just don't know how that's really changed. You know,
the numbers, I get, the stress of finding a new job,
I understand all that, But the reasons behind it, I
think they're sort of just using the typical ones.
Speaker 3 (16:04):
I would agree.
Speaker 2 (16:05):
I think speaking of the labor market, the other point
that I get made to me frequently from people is,
so I've talked about, you know, hey, the Trump incoming
Trump administration is going to probably have a tougher time
igniting the labor market in the same way that they
successfully did in twenty sixteen. And to give you a
(16:26):
sense for this, when Donald Trump took office in twenty sixteen,
the employment to population ratio for those that are aged
twenty five to fifty four. If you're not working from
twenty five to fifty four it's either because you're disabled
or because I don't even you're laid off and you
can't find work. Right, That's kind of how I look
(16:46):
at this is this is the key working demographic. Most
people are looking for work. Then when Donald Trump took office,
that was sitting around seventy seven percent.
Speaker 3 (16:54):
By the time he.
Speaker 2 (16:54):
Left office right before COVID anyway, you know, end of
twenty nineteen, it got nearly as high as it's ever been,
at about eighty point six percent of the population twenty
five to fifty four working. That's higher than it ever
was in the mid two thousands, you know, per your
great recession, we only got to eighty point three percent.
(17:15):
The only time that we've ever been higher than that
was in the late nineties early two thousands. That is
the only time in US history where the population of
twenty five to fifty four year olds was more employed
than the end of the first Trump presidency. Right now,
were at eighty point six percent. It's exactly where we
were when Donald Trump, you know, left, not didn't leave office,
(17:37):
when when Donald Trump was running the economy prior to
the to the COVID crisis. So I hear a lot
about like, oh, well, you know, there's so many people
just not working. They're sitting on their couches, they're not
going to work. Well, maybe, you know, maybe there is
another one to two percent of twenty five to fifty
four year olds who can go get employed if the
right efforts and incentive are there. But history would tell
(18:02):
you otherwise. History would tell you that there's not very
many other people there, even in the very best economies
that we've seen. Right thinking about think about the economy
at seven before the Great Financial Crisis, that thing was humming,
people were working. Think about the economy over the last
few years, the last few years of Trump administration, we
have not been able to get this thing over eighty
(18:23):
point six percent. And so that would be my point
here is it is a stagnant labor market. There's not
a lot of turnover. But there's also not, at least
as far as I can tell, going to be a
lot of ability to get millions more people into jobs
come twenty twenty five, twenty twenty six, unless I'm dramatically
missing something here.
Speaker 4 (18:43):
No, I mean, you have an unemployment rate that sits
at four point one percent. The lowest we hit was
three and a half.
Speaker 3 (18:48):
So Yeah, there.
Speaker 4 (18:49):
Isn't a lot of flexibility.
Speaker 2 (18:51):
Yeah, not a ton of slack to get this thing
ramped back up in the other direction. And I just
bring up that one because I think it is a
better than the unemployment right, because people always doubt that
that like, well, that person's not looking for work. No,
this is looking at every person working compared to the
entire population. And the only time we've been better than
(19:13):
this was late nineties, early two thousands. I don't know,
it's going to be challenging to turn that around. I
want to take a quick break. We've got Wall Street
Watch coming right up, and then I want to talk
a little bit more about the labor market. Like I said,
we've got this Job's report coming on Friday. Few other
interesting pieces from this survey that I want to talk
to you next on the Financial Exchange.
Speaker 1 (19:42):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 5 (20:03):
The markets are dipping into negative territory one day after
the S and P five hundred notched a fresh record
high as investors are reacting to the latest job openings data.
Right now, the Dow is off by a third of
a percent, or one hundred and forty five points, SMP
five hundred is down by only nine points, and the
Nasdaq is actually edging three points higher at the moment.
(20:26):
Russell two thousand also off a third of a percent.
Tenure Treasure reeled is flat at four point one to
nine percent, and crude oil is up nearly two percent higher,
trading at sixty nine dollars in thirty six cents a barrel.
Shares in US Steal down by over nine percent after
President elect Donald Trump reiterated last night that he will
(20:49):
block the purchase of the steel maker by Japan's Nippon Steel,
which was agreed upon in late twenty twenty three. Meanwhile,
AT and T up by four percent after the The
telecommunications company said it anticipates more than eighteen billion dollars
in free cash flow in twenty twenty seven. AT and
T laid out its three year vision this morning, which
(21:10):
includes plans to double its fiber internet availability and enhance
its five five G network. After its twenty nine percent
gained yesterday's Shares in super micro Computer up another four
percent today, following news yesterday that a special committee of
the board of directors said have found no evidence of
misconduct elsewhere. CBS Health was upgraded by Deutsche Bank to
(21:34):
buy from hold, with the firm said it believes earnings
will recover and top consensus estimates. CBS up by one percent.
Zscaler narrowed its loss and posted higher quarterly revenue, but
its current quarter forecast disappointed investors, sending shares in the
cloud security company down by three percent. And after today's
(21:55):
closing bell, we'll see third quarter earnings from Salesforce and
oct On Tucker Silvan. That's Wall Street watch.
Speaker 2 (22:02):
So, Paul, before we move on from the labor market again,
we had a jolt support this morning. We'll get a
weekly unemployment claims report Thursday, followed by the big jobs
report on Friday, and as we talked about to set
the groundwork for that report, it's likely to be messy
because October was messy due to hurricanes and November. You
(22:22):
could very very likely see a snap back in terms
of hiring. If you don't, that might indicate something else.
But you know, let's say you had three to four
hundred thousand jobs created. Even that would be a big,
big number any other time of year, but then it,
you know, for November, it wouldn't be.
Speaker 3 (22:37):
All that shocking.
Speaker 2 (22:39):
We had this survey here of people feeling stuck on
the job and looking for work, and I think this
is one area where I tend to see a lot
of mistakes by people in terms of, Hey, if you
want to maximize your compensation, one of the best things
to look at. And it's definitely true that study after
study have proven the best way to grow your compensation
(23:03):
quickly is by hopping from one company to another. You
tend to get bigger raises because there's an unknown there.
There's an uncertainty. The new employer does not know how
much you made in your previous job, and they're more
likely to bid.
Speaker 3 (23:16):
Up on that type of thing.
Speaker 2 (23:18):
They're not familiar with your skill set, you were getting compensated,
and so that's pretty logical in terms of how that works.
So one of the mistakes I see is people refusing
to look around because they get too comfortable. The other one, though,
I think, is not properly understanding how much you actually
make on a job.
Speaker 3 (23:37):
Believe it or not.
Speaker 2 (23:39):
There's some obvious pieces. Most people know their hourly rate.
Most people know their annual compensation. A lot of people
don't know how much over time they make in a year.
A lot of people might not know how much bonus.
And rarely do people actually know how much of their
health insurance is covered by their employer, how much they're
eligible for in terms of a bonus, how much their
(24:01):
employer matches on a four oh one K or an HSA,
or help with student loans. Sometimes employers offer things like
profit sharing or company stock. Very rarely do I hear
people properly utilizing that tool, right, Like, you know, you've
talked to people all the time with restricted stock units
or ISOs and all these types of things.
Speaker 3 (24:23):
And I think my.
Speaker 2 (24:25):
Takeaway is you should you know absolutely if you're dissatisfied
in your job or if you're looking to make more money.
One of the easiest ways to do that is by
jumping from a different place and going and valuating that.
But before you do it, you actually have to be
educated on the subject.
Speaker 3 (24:40):
Right.
Speaker 2 (24:41):
You know, you jump from one job seventy to eighty
thousand dollars in total compensation, that sounds great, Then you
find out that your new employer doesn't cover nearly as
much of your health insurance and doesn't provide a four
to one k match, you might be making less on
a net basis for your long term growth.
Speaker 3 (24:56):
Really important.
Speaker 4 (24:57):
I had a conversation with mccla who runs a company
and covers one hundred percent healthcare covers full benefits, and
heard he had an employee that was requesting a raise,
and that was one of the pieces that he actually
had me dig up and do some research. He knew
that it was a tremendous benefit that he was offering,
(25:19):
but he wanted to get a sense for you know,
what is your company cover, what do others out there
in Massachusetts cover? And you know it ranges from seventy
eighty percent depending on your employer out there. So this
one hundred percent benefit for a family, you're talking about
thousands of dollars of benefit that someone can access. So
all those things are really important to understand. Every company
(25:39):
has their own bells and whistles, and it's helpful just
to get a sense for looking else what else is
out there? Are you underpaid overpaid? Doing that search, get
a sense for what the market is for your services.
And you could find yourself that maybe the grass isn't
always greener on the other side when you do that search.
Speaker 2 (25:56):
Yeah, and people have been finding that recently, both where
they are on the other side unfortunately recently. According to
Bloomberg and Connor Sen, New York can show the US
how to build more housing, will they, Paul.
Speaker 4 (26:09):
Doubtful, but I do I Connor Send does some really
good pieces at Bloomberg. I think we've had him on
the show before too, but really has some good context
to the real estate industry in general and the trends
in the different parts of the country. Sure, the Southeast
is an area. The southeast and Southwest have been areas
where we've seen a significant boom in construction over the
(26:31):
course of the last couple of years. What has been
consistent during that period is the Northeast being just absolutely
atrocious in terms of its sluggishness on construction. And this
dates back decades. Really, it's not even a phenomenon over
the last four or five years. What he mentioned in
this piece is the proposal that I believe is going
to be signed into law later this month through New York,
(26:52):
where eighty thousand housing units would be added through permits
to add accessory dwelling unit on lots that were intended
for one to two family, single family to too family
residents out there. So basically, this idea that more duplexes
and more triplexes would be built in certain areas of
New York a big initiative to do yimby instead of nimby.
(27:18):
So yes in my backyard rather than not in my backyard.
But you can, you know, change the zoning restrictions and stuff,
but it's not always a home run in order to
have more housing construction.
Speaker 2 (27:31):
Yeah, yeah, I'll just tell you. I think that there
are some things that are going to work pretty well.
But unless areas are really willing to take the carrot
and stick approach, I just don't see it happening in
the Northeast. So I'll give you a recent example. The
carrot and stick approach has been attempted here in Massachusetts.
I would argue without a big enough carrot or stick
(27:52):
with the MBTA zoning laws not familiar, not for Massachusetts.
You know, housing's outrageously expensive here. I think you're probably
aware of that, and the legislature basically passed a rule saying,
if you're serviced within a certain distance of the MBTA
commuter rail train station, bus station, then you have to
have a certain quantity or percentage. I don't remember how
(28:13):
they did it of multi family housing, but the stick
doesn't really work. Their only option is to really sue
towns over this if they propose to pass it.
Speaker 3 (28:23):
My hometown.
Speaker 2 (28:24):
My hometown, the legislature in the town passed zoning rules
to adhere to this.
Speaker 3 (28:30):
And actually exceeded it immediately.
Speaker 2 (28:34):
Ballot initiative got enough signatures where the town of Needum
is now going to vote on this, probably to overturn
their willingness to comply with the zoning rule, which I
personally completely disagree with. I am totally fine with us
developing a bunch of multi family housing in the center
of town to frankly bring down the cost of housing
in New England. And it's not as though our town
(28:56):
is having to put up money. They're just having to
zone it for the possibility if somebody's developed multifamily. But
housing is local, and I am seeing it over and
over again where even when the town legislature votes to
approve this type of thing, the voters come NIMBI comes
out and they say I don't want my town to change.
I don't want to look different, feel different. I don't
(29:18):
want new people in it, and I'm voting to overturn it,
which I find disappointing. But is the reality that a
lot of these towns are similarly.
Speaker 4 (29:24):
I've had it on the other side where my sister
works in commercial real estate, and there's been banter about
this idea of converting office spaces into residential units in
the city of Boston, and that one she has informed
me that from a cost perspective, it's extraordinarily expensive to
undergo that endeavor. And secondly, the sort of caveat with
(29:46):
that is a certain percentage of that housing you get
a break on your property taxes. That's the big incentive
that Boston was mentioning with this conversion for fifty years,
a really long period of time. But a certain percentage
of your units have to be actually horrible housing. And
her point was from a profit margin standpoint, a commercial
real estate developer is not going to go in there
and spend millions of dollars to rehab units and then
(30:08):
have twenty to twenty five percent of their units not
be significantly profitable. I mean, that's just the numbers of it.
Not to say, from a social initiative side of things,
it's not, you know, a bad thing, but the economics
don't line up.
Speaker 2 (30:21):
Can make money elsewhere. Let's take a quick break. When
we come back, we's talk about the piece of legislature
working its way through Congress on social security might apply
to you. Stay tuned, we'll cover that next here on
the Financial Exchange.
Speaker 1 (30:33):
Thanks to US six one, seven, three, six two thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network,
Business and financial news affecting the markets and your wallet.
We've got it all straight from Wall Street right here
(30:53):
on the Financial Exchange Radio Network.
Speaker 3 (31:00):
MarketWatch has a piece this morning.
Speaker 2 (31:04):
The Social Security Fairness Act is incredibly irresponsible.
Speaker 3 (31:08):
It's define what the heck this is?
Speaker 2 (31:09):
First and foremost, there are two laws out there that
can affect some people's social security. That would be the
Government Pension Offset the GPO and the Windfall Elimination Provision
the WEB, both of which are on the chopping block
right now. And why this author thinks they're incredibly irresponsible?
I tend to agree with is because you would be
giving a whole bunch more in Social Security benefits out
(31:31):
without raising revenue at all. And if we know one
thing about Social Security, it's that it's about to go
bust in about eight years. And so if you did
this without raising revenues in any way, guess what you're
gonna make it go bust faster.
Speaker 3 (31:44):
That haven't been said.
Speaker 2 (31:45):
I think there are some reasonable complaints about the rules
that affect Social Security, specifically on the windfall elimination provision side,
in my opinion, So if you're not familiar, let's say
you were a teacher for ten years and then worked
in other twenty years in the private sector, and therefore
this is specific to mass Chusetts and a number of
(32:05):
other states. But during that ten years as a teacher,
you did not pay into Social Security. You are eligible
for a pension from the Commonwealth of mass Chusetts in
that case, and because you did not pay into Social
Security for a full thirty years, that pension is going
to partially offset your Social Security benefits. And in my mind,
that's kind of ridiculous because your Social Security benefits are
(32:28):
already accounting for the fact that you didn't work thirty years.
They are lower because of that fact, and your pension
is lower because you only worked ten years for the
Commonwealth of mass chusets.
Speaker 4 (32:38):
Yeah's it gonna be a big pension.
Speaker 2 (32:40):
So I kind of look at those rules and say,
is this really accomplishing what we wanted it to accomplish,
or is it just making it so people don't really
have job mobility the government pension offset. On the other hand,
I think there's a lot of good reasons that this exists.
So to explain this one, I'm just going to use
an example, and I'm going to try and create a
boogeyman here. So let's say that you worked long and
(33:01):
hard in your career with the Massachusetts Department of Revenue.
You were collecting taxes for the Commonwealth of Massachusetts. You
can guess why I'm going down this road for the boogeyman.
And you are therefore eligible for a pension from the commonwealth,
and you are not eligible for any Social Security because
you didn't pay into soci Security. You didn't work, You
(33:21):
didn't pay into Social Security for any period of time,
but your wife did. Your wife worked thirty years in
the private sector for take your pick. Gillette, big Massachusetts company,
and therefore you are eligible for half of her Social
Security benefit under the government pension offset. You don't get
that because you've got this pension, you had your own work,
You've got your pension. That's not what it was designed for.
(33:43):
They want to get rid of that, and I think
that's I think that's kind of silly that, hey, I'd
be able to collect spousal benefits from my spouse's work
at the same time as collecting a robust pension from
the other side for my own work. That seems kind
off to me. And that's not why the spousal benefit
was created. The spousal benefit was created to compensate people
who worked in the home during their lifetime. And so
(34:05):
I think it's a little bit more nuanced than just saying, hey,
we need to do away with these rules because they're
unfair and give more people more Social Security benefits at
the risk of making the program go belly up faster.
But I also think it's pretty likely that this could
get passed and these things do go away. And what
I would say to you is that if you are
working in a role where you are eligible for a
(34:26):
pension from the federal government from the state government, and
you haven't really thoroughly understood how it's going to affect
your Social Security benefits or looked into tactics where you
can increase your total retirement income. Right if you've been
working for the state of Massachusetts for thirty five years
and you've maxed out your retirement benefits there, it could
make a lot of sense for you to go find
even a part time job elsewhere in order to get
(34:48):
paid into Social Security for long enough to collect. If
you have questions along those lines, you're not really sure
how these things are going to affect your retirement benefits,
please give the folks at Armstrong Advisory Group a call.
We work with a number of people in all different
sorts of roles here who have been affected by the
WEB or the GPO, and we can help you maximize
those benefits and most importantly plan them out so that
(35:11):
it's all accounted for properly in your personal financial plan.
You can call our office at eight hundred three nine
three four zero zero one the Armstrong Advisory Group. We
offer free appointments across New England for folks that want
to sit down and really dig into their personal financial situation,
and again that number to talk to somebody and book
your appointment now is eight hundred three nine three for
(35:34):
zero zero one.
Speaker 1 (35:35):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (35:51):
Paul Black, Friday has come and gone. Cyber Monday has
come and gone, which means it's the most wonderful time
of the year for people that love of stealing packages
off of your front porch, those porch pirates, and there
was a new product out there just for you.
Speaker 1 (36:07):
You know.
Speaker 2 (36:07):
First thing that I think we started doing in reaction
to this was some sort of lock box or you know,
I've seen the ability to instruct the delivery driver to hey,
put this thing on my back porch because I don't
want I don't want to get and stolen right off
of there. Anyone that's lived in Somerville, Cambridge, Boston, Medford,
you know, or really anywhere around a major city across
(36:28):
the country has had probably something attempt or successfully get
stolen off of their porch, so I can I can
feel this one. Then we had the smart doorbells, so
I've got a couple of those on my house where
I can at least see the porch pirates steal a
thing directly from me. That doesn't really help because they're
usually wearing a mask of some sort, so I can't
properly identify that person, but I can actually watch you
(36:50):
steal my product. Now we've got porch Pirate insurance, and
I wish there was a P letter word for insurance
that we could really, you know, dive in touch Porsch
Pirate protection. I like that triple P for folks that
want to protect their packages from being stolen or at
least ensure them. For one hundred and twenty dollars a year.
(37:12):
You can get porch Pirate protection for.
Speaker 4 (37:15):
Three claims a year and up to two thousand dollars
of stoven stolen delivery.
Speaker 2 (37:19):
This is not going to work for your house, Paul,
you have a new three packages at your door. I
would be willing to bet that you average more than
two packages at your door every single day in the
month of December.
Speaker 4 (37:30):
Oh yeah, absolutely, I mean, Chuck and I once did
a exploration on how many Amazon orders we had over
a calendar period, and I believe my househol was three sixty.
It was almost one a day. It averaged out too.
Speaker 1 (37:42):
I think I'm both of time.
Speaker 2 (37:43):
See, I can't track this easily because my wife and
I have we share an Amazon Prime account, but we
have separate logins, so I don't know what she's getting shipped.
I'll I'll have to look into this and get back.
Speaker 4 (37:52):
I'll run back the numbers for the second hour, but
I'm pretty sure that's where we came at. Luckily, in
the burbs, knock Wood, you don't have to worry. As
the city. I had it every single time, and if
I had valuable stuff, you got to send it out
to the burbs.
Speaker 2 (38:06):
So get your porch pirate protection. Let's take a quick break.
When we come back, we'll have a full market recap.
Markets have turned negative around the eleven o'clock hour and
a lot more to cover next on the financial exchange,
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is The Financial
Exchange with Mike Armstrong and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAV five Boston and making a donation today.
The DAV five K Boston is presented by Veterans Development Corporation.
(01:07):
Face is the Financial Exchange with Mike Armstrong and Paul Lane.
Speaker 2 (01:13):
Good morning, Welcome back to the Financial Exchange. It's a
Jobs Tuesday here on the Financial Exchange. We'll get the
big Jobs report on Friday of this week, but this
morning at ten am, just six minutes ago, we did
receive the Joltz Report. That's the job Opening's labor turnover
survey that we get monthly, so we'll be diving in there.
(01:34):
And that's all ahead of the Federal Reserve meeting which
is coming up on the eighteenth of December, with some
board members commenting on the potential direction of interest rates
as we go there. It's Mike Armstrong and Paul Lane
and Tucker Silva with you on this Tuesday morning where
we open up with markets mixed again for the second
day in the row, SMP flat, NAZAC up slightly, Dow
(01:56):
down slightly, and let's jump right in, Paul to the
upcoming Federal Reserve meeting, because that's where eyes are finally
starting to return to right. We've had I think November
was the month of Trump presidency digestion, and everyone the
only thing they wanted to talk about was how is
(02:16):
it going to work, tariffs, taxes, regulation, what's going to happen,
you know, is capital one going to be allowed to
buy discover financial what's going to happen with the banking sector,
what's going to happen with electric vehicles, and everything in between.
That will all continue, but I think a lot of
those trades have now played out and it's back to
the fundamentals of what's the Fed going to do, what's
(02:37):
the job market looking like, what's inflation looking like?
Speaker 3 (02:40):
And that's normal, healthy and a good thing.
Speaker 2 (02:44):
We don't need to spend all of our time trying
to figure out what laws Donald Trump's presidency and Congress
is going to pass under him.
Speaker 4 (02:51):
There's only so many times you can go through a
segment and say, we'll see, you know, how this plays out,
or we'll wait for further details. And we really exhausted that.
We you know, the collective financial commentary industry exhausted that
as much as possible. And there's that significant period where
it's about what's a two months to the day from
the election results to inauguration, where you just have a
(03:14):
lot of time to kill and sort of banter about policies.
So it's nice to see on the financial presses that
we read and digest so consistently that the topic has
skewed back to kind of normal month to month affairs
of jobs reports, inflation, and FED meetings. Those are kind
of the crux of the economy that we're focused on
right now.
Speaker 2 (03:33):
So let's jump right in there on the Federal Reserve piece,
because there's a few pieces out there this morning, but
a few different ways of looking at guesses and bets
and insinuations about the Federal Reserve's next moves are indicating
another rate cut come December. You've got the dollar dipping
a bit after surging on again some of that Trump
(03:55):
trade rhetoric on tariffs and things along those lines. You've
got money markets betting on a cut. What is the
Chicago Mercantile Exchange looking like? Now? This is where we
source data on how bets are being placed at the
CME on what the Feds to do next fall.
Speaker 4 (04:11):
So where we've sat here from September is about seventy
five basis points of cuts have gone on thus far
from where we began earlier in the fall. Looking at
the most upcoming meeting, which will be December eighteenth, There
now is a seventy four percent probability, according to the
CME Group, that the Fed will cut by another twenty
five basis points, making it a full percentage cut. From
(04:33):
the beginning of September when they endeavored down this rate
cutting cycle. That percentage was as low as fifty five
percent on Monday, So that has ticked up a little
bit here, largely off the backs of commentary from the
Fed's Governor, Christopher wall In which we'll get into in
a moment here, But it does seem like all indications
at this point indicate that there is going to be
(04:54):
a cut for this upcoming meet in December. Now, if
you go out a little further on the meeting count unders,
when you scrutinize January or March of twenty twenty five
those meetings, it's less clear that there will be continued
cuts at this pace that we've seen, you know, since
the beginning of September.
Speaker 2 (05:12):
Here, Yeah, I think the main narrative to understand about
interest rates since the election is that there has been
a change in assumptions pretty significantly. Sorry, I need to
think that through a little bit, but change in assumptions
pretty significantly towards the upside on growth and potential upside
on inflation. That's been the if you read through the
(05:34):
real Trump trade, as we've talked about it here. Equity
markets have obviously surged a good five to six percent
since the election, but interest rates have two. And so
if you're trying to read the tea leaves here, what
investors seem to be digesting and assuming is that a
Trump administration compared to a Harris administration means lower taxes,
less regulation, more growth. I think for the economy, that's
(05:55):
what you need to take away. And with those factors
higher tariffs, high growth, less regulation, lower taxes, you have
that possibility of higher inflation. And so when we look
across the board right, whether you're looking at January February
rate cuts, where we're fast forwarding all the way out
to June of next year, the probability that rates are
substantially lower than they are now has decreased. It is
(06:21):
less probable that rates are coming down substantially over the
next six to nine months as that was priced in
for say a Biden two point zero administration through a
potential Harris. So that's where things stand from the federal
Reserve's perspective, probably not going to change their path in December,
because quite honestly, the water is pretty muddy right now.
(06:42):
You've had the hurricanes that disrupted the October jobs report.
I expect on Friday, when we receive the November jobs
report that you'll see some snap back in job creation
come November, just you know, returning to a more normal
degree of all of that. For a frame of reference, here,
in the month of September, you saw two hundred and
(07:03):
twenty three thousand jobs created. In the month of October,
you saw only twelve thousand net jobs created. We've been
running averages probably in the one hundred and fifty to
two hundred thousand range over the course of this year,
and so obviously the October report was abysmal and was
pretty easily explained by hurricanes. But frankly, if you saw
(07:24):
a snapback of three hundred thousand jobs created in November,
I don't think the FED would even look at that
and say, oh, watch out, we're heading for inflation.
Speaker 3 (07:30):
They would probably just look at that and say, well,
this could.
Speaker 2 (07:33):
Be a serge in demand for labor, or it could
just be that those jobs that didn't get filled because
of hurricanes in October are getting filled in November, and
so let's not do anything about it.
Speaker 4 (07:45):
Right. You had that, plus you had the machine of
strike at Boweling that contributed to those numbers from the
October report as well. So there was a couple different
factors in play there. You have a labor market which
we continue to sort of scrutinize the sea where it's sits.
And then you also have though an economy in general
from a GDP perspective, that has been growing really strongly.
(08:06):
We came in at Q three GDP growth of two
point eight percent, and so when you look at the
Federal Reserve and some of these concerns that Mike was
alluding to, this idea that perhaps this inflation could stoke
up or the idea of just consistent rate cuts marching
on through twenty twenty five.
Speaker 3 (08:23):
Has been paused.
Speaker 4 (08:25):
Is because you have a strong economy growing at two
point eight percent for the third quarter. Consumer spending has
been there. If you look at the GDP numbers, the
only argument or caveat is continues to be that labor market,
really where does it sit? And it seems like we're
going to come out of the jobs report on Friday. Likely,
I'm sure, Mike, because you're gonna have one absolute disastrous
(08:46):
month of data that was easily explainable, and then to
your point, we could have another month from the month
of November that could look tremendous, but it could be
all that muddying just because of the hurricanes and those
one off impacts that we talked about.
Speaker 2 (08:59):
Taking a look at it market interest rates, We've got
the yield on the ten year Treasury sitting at four
point one eight six percent today, largely flat. Awaiting again
more of this economic data as well as commentary from
Federal Reserve speeches today. The yield on the thirty year
fixed rate mortgage, according to Mortgage News Daily as of yesterday,
sitting at six point nine one percent. That's up from
(09:21):
a recent.
Speaker 3 (09:22):
Low of.
Speaker 4 (09:26):
Six point one.
Speaker 2 (09:27):
Six one six one five somewhere in that range back
in September. The average rate according to Bank Rate for
auto loans, the average auto loan interest rate for new
cars in the second quarter of twenty four was sitting
at six point eight four percent. Keep in mind that
was second quarter of twenty four, so this data is
a little bit outdated at this point and on used
(09:51):
cars right now. If you have the highest credit the
average indust rates sitting at seven point three percent, those
very into the high teens in low twenties.
Speaker 3 (10:01):
If you are below.
Speaker 2 (10:02):
Average credit scores, let's take a quick break. When we
come back, want to dive into this new Joltz report
as well as this recent survey was the done of
twenty thousand US workers and their satisfaction on the job.
Will be covering the labor market next.
Speaker 1 (10:19):
This is your home for the most comprehensive coverage of
the economy and the trends on Wall Street. Face is
the Financial Exchange Radio Network. The Financial Exchange streams live
on YouTube. Like our page and stay up to date
on breaking business news all morning long. Face is the
Financial Exchange Radio Network.
Speaker 5 (10:43):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
Speaker 3 (10:49):
The US Virgin.
Speaker 5 (10:49):
Islands are Saint Croix, Saint Thomas, and Saint John. With
winter on the horizon, now's the time to start looking
at a fabulous holiday vacation and there's no better place
than the US Virgin Island. Enjoy perfect weather, world class dining,
incredible beaches and a vibrant nightlife. No passport is needed,
and there's no money to exchange. Take your next vacation
in America's Caribbean paradise the United States Virgin Islands. Go
(11:13):
to visit USVII dot com to book your trip. That's
visit USVII dot com.
Speaker 2 (11:18):
Paul, I want to talk a little bit about the
state of the labor market right now, because according to
the Wall Street Journal Journal, a recent study that was
done by Gallup showed that more than half of the
twenty thousand US workers whom they surveyed in November said
they were watching for or actively seeking a new job.
That is the largest share since twenty fifteen. And mark's
(11:42):
a pretty significant change compared to where we were with
this labor market over the last few years. And I
actually think that this makes a lot of sense in
terms of how people are responding to surveys, because the
way that I would describe this labor market right now
is healthy but stagnant. I think that's kind of how
(12:07):
I would describe it as you're not seeing a big
spike in unemployment, you're not seeing big layoffs, but you're
also not seeing much churn in terms of the labor market.
We talked about a report that came out at ten
am this morning, the Job Openings Labor Turnover Survey. It
does exactly that. It tries to indicate to you how
much churn is there in the labor market, how quickly
(12:29):
are people finding new jobs, separating from service quitting, getting hired,
those types of statistics. It is also pretty useful for
determining some degree of the tightness of the labor market.
Right when we talk about that ratio from a few
years ago where there were two jobs open for every
one person looking for work. We get that from the
JOLT survey too. But what I'm kind of concluding here is,
(12:51):
so naming the numbers here, the job openings, we're sitting
at seven point seven million. That was unchanged from the
previous month. Hires changed very little, sitting at five point
three million. Separations was a little changed at also five
point three million. Quits rate three point three million. It increased,
but layoffs and discharges didn't really move.
Speaker 3 (13:13):
And you know, an important measure.
Speaker 2 (13:15):
That I like to look at is the rate at
which people are leaving their job. So total separations as
a percentage of the overall labor force was sitting at
three point three percent, and it was the third month
in a row where the total separations rate was sitting
at three point three percent. And for some context here
(13:36):
in twenty twenty one and twenty twenty two, when we
talk about those really hot labor markets, you were sitting
at you know, three nine to four two. So we're
not talking about like fifteen percent separations rate, but a
move of that magnitude is significantly higher. If you go back,
and this is the comparison that we've been making a
lot about the labor market of the last few months,
(13:58):
if you go back to the twenty tens and try
and find that similar labor market in terms of rate
of separations, you're looking at twenty fourteen to twenty fifteen levels,
which is the same thing as the ratio of unemployed
to job openings. It's a number of these things where
we're looking at and saying, hey, this economy is looking
and feeling much more like the mid twenty tens, which
(14:22):
for stock market investors wasn't a bad period of time,
but for people looking for work and looking for raises
and trying to get ahead in the labor market wasn't great, right,
It was a challenging labor market, and so that's kind
of where I'm landing with this is I'm not surprised
that more than half of people are looking for a
new job, and I'm not surprised that probably a lot
of them are struggling to find that new job.
Speaker 4 (14:41):
Yeah, it does seem like there is this real sort
of stasis in the labor market where the employers are
really trying to retain employees because it's the cheapest way
to do things. We've seen all sorts of business shocks
of the course of the last three or four years,
so there's this hesitancy from employers to layoff employees in
case there is a surgeon demand. They want to make
sure that they have the applicable staffing in place to
(15:04):
meet that. And then on the employee side of things,
you have employees who've been battling inflation and also a
focus on a lot of their by their a lot
of their employers to not over extend budgets. So it
just has been sort of this keep things pat and
not make any changes, and that's reflected by the quits
right there. Some of the details as to why people
(15:29):
are feeling more stuck on the job in this piece
in the Wall Street Journal, mic, I don't know how
much they contribute. They're saying, you know, more meetings, the
messaging and things like that are leading people to feel
like they're overwhelmed and burnout. To me, I don't really
understand how the labor dynamics have shifted that dramatically post
twenty twenty. All of this stuff with meetings and messaging,
(15:52):
I just don't know how that's really changed. You know,
the numbers, I get, the stress of finding a new job,
I understand all that, But the reasons behind it, I
think they're sort of just using the typical ones.
Speaker 3 (16:04):
I would agree.
Speaker 2 (16:05):
I think speaking of the labor market, the other point
that I get made to me frequently from people is,
so I've talked about, you know, hey, the Trump incoming
Trump administration is going to probably have a tougher time
igniting the labor market in the same way that they
successfully did in twenty sixteen. And to give you a
(16:26):
sense for this, when Donald Trump took office in twenty sixteen,
the employment to population ratio for those that are aged
twenty five to fifty four. If you're not working from
twenty five to fifty four it's either because you're disabled
or because I don't even you're laid off and you
can't find work. Right, That's kind of how I look
(16:46):
at this is this is the key working demographic. Most
people are looking for work. Then when Donald Trump took office,
that was sitting around seventy seven percent.
Speaker 3 (16:54):
By the time he.
Speaker 2 (16:54):
Left office right before COVID anyway, you know, end of
twenty nineteen, it got nearly as high as it's ever been,
at about eighty point six percent of the population twenty
five to fifty four working. That's higher than it ever
was in the mid two thousands, you know, per your
great recession, we only got to eighty point three percent.
(17:15):
The only time that we've ever been higher than that
was in the late nineties early two thousands. That is
the only time in US history where the population of
twenty five to fifty four year olds was more employed
than the end of the first Trump presidency. Right now,
were at eighty point six percent. It's exactly where we
were when Donald Trump, you know, left, not didn't leave office,
(17:37):
when when Donald Trump was running the economy prior to
the to the COVID crisis. So I hear a lot
about like, oh, well, you know, there's so many people
just not working. They're sitting on their couches, they're not
going to work. Well, maybe, you know, maybe there is
another one to two percent of twenty five to fifty
four year olds who can go get employed if the
right efforts and incentive are there. But history would tell
(18:02):
you otherwise. History would tell you that there's not very
many other people there, even in the very best economies
that we've seen. Right thinking about think about the economy
at seven before the Great Financial Crisis, that thing was humming,
people were working. Think about the economy over the last
few years, the last few years of Trump administration, we
have not been able to get this thing over eighty
(18:23):
point six percent. And so that would be my point
here is it is a stagnant labor market. There's not
a lot of turnover. But there's also not, at least
as far as I can tell, going to be a
lot of ability to get millions more people into jobs
come twenty twenty five, twenty twenty six, unless I'm dramatically
missing something here.
Speaker 4 (18:43):
No, I mean, you have an unemployment rate that sits
at four point one percent. The lowest we hit was
three and a half.
Speaker 3 (18:48):
So Yeah, there.
Speaker 4 (18:49):
Isn't a lot of flexibility.
Speaker 2 (18:51):
Yeah, not a ton of slack to get this thing
ramped back up in the other direction. And I just
bring up that one because I think it is a
better than the unemployment right, because people always doubt that
that like, well, that person's not looking for work. No,
this is looking at every person working compared to the
entire population. And the only time we've been better than
(19:13):
this was late nineties, early two thousands. I don't know,
it's going to be challenging to turn that around. I
want to take a quick break. We've got Wall Street
Watch coming right up, and then I want to talk
a little bit more about the labor market. Like I said,
we've got this Job's report coming on Friday. Few other
interesting pieces from this survey that I want to talk
to you next on the Financial Exchange.
Speaker 1 (19:42):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 5 (20:03):
The markets are dipping into negative territory one day after
the S and P five hundred notched a fresh record
high as investors are reacting to the latest job openings data.
Right now, the Dow is off by a third of
a percent, or one hundred and forty five points, SMP
five hundred is down by only nine points, and the
Nasdaq is actually edging three points higher at the moment.
(20:26):
Russell two thousand also off a third of a percent.
Tenure Treasure reeled is flat at four point one to
nine percent, and crude oil is up nearly two percent higher,
trading at sixty nine dollars in thirty six cents a barrel.
Shares in US Steal down by over nine percent after
President elect Donald Trump reiterated last night that he will
(20:49):
block the purchase of the steel maker by Japan's Nippon Steel,
which was agreed upon in late twenty twenty three. Meanwhile,
AT and T up by four percent after the The
telecommunications company said it anticipates more than eighteen billion dollars
in free cash flow in twenty twenty seven. AT and
T laid out its three year vision this morning, which
(21:10):
includes plans to double its fiber internet availability and enhance
its five five G network. After its twenty nine percent
gained yesterday's Shares in super micro Computer up another four
percent today, following news yesterday that a special committee of
the board of directors said have found no evidence of
misconduct elsewhere. CBS Health was upgraded by Deutsche Bank to
(21:34):
buy from hold, with the firm said it believes earnings
will recover and top consensus estimates. CBS up by one percent.
Zscaler narrowed its loss and posted higher quarterly revenue, but
its current quarter forecast disappointed investors, sending shares in the
cloud security company down by three percent. And after today's
(21:55):
closing bell, we'll see third quarter earnings from Salesforce and
oct On Tucker Silvan. That's Wall Street watch.
Speaker 2 (22:02):
So, Paul, before we move on from the labor market again,
we had a jolt support this morning. We'll get a
weekly unemployment claims report Thursday, followed by the big jobs
report on Friday, and as we talked about to set
the groundwork for that report, it's likely to be messy
because October was messy due to hurricanes and November. You
(22:22):
could very very likely see a snap back in terms
of hiring. If you don't, that might indicate something else.
But you know, let's say you had three to four
hundred thousand jobs created. Even that would be a big,
big number any other time of year, but then it,
you know, for November, it wouldn't be.
Speaker 3 (22:37):
All that shocking.
Speaker 2 (22:39):
We had this survey here of people feeling stuck on
the job and looking for work, and I think this
is one area where I tend to see a lot
of mistakes by people in terms of, Hey, if you
want to maximize your compensation, one of the best things
to look at. And it's definitely true that study after
study have proven the best way to grow your compensation
(23:03):
quickly is by hopping from one company to another. You
tend to get bigger raises because there's an unknown there.
There's an uncertainty. The new employer does not know how
much you made in your previous job, and they're more
likely to bid.
Speaker 3 (23:16):
Up on that type of thing.
Speaker 2 (23:18):
They're not familiar with your skill set, you were getting compensated,
and so that's pretty logical in terms of how that works.
So one of the mistakes I see is people refusing
to look around because they get too comfortable. The other one, though,
I think, is not properly understanding how much you actually
make on a job.
Speaker 3 (23:37):
Believe it or not.
Speaker 2 (23:39):
There's some obvious pieces. Most people know their hourly rate.
Most people know their annual compensation. A lot of people
don't know how much over time they make in a year.
A lot of people might not know how much bonus.
And rarely do people actually know how much of their
health insurance is covered by their employer, how much they're
eligible for in terms of a bonus, how much their
(24:01):
employer matches on a four oh one K or an HSA,
or help with student loans. Sometimes employers offer things like
profit sharing or company stock. Very rarely do I hear
people properly utilizing that tool, right, Like, you know, you've
talked to people all the time with restricted stock units
or ISOs and all these types of things.
Speaker 3 (24:23):
And I think my.
Speaker 2 (24:25):
Takeaway is you should you know absolutely if you're dissatisfied
in your job or if you're looking to make more money.
One of the easiest ways to do that is by
jumping from a different place and going and valuating that.
But before you do it, you actually have to be
educated on the subject.
Speaker 3 (24:40):
Right.
Speaker 2 (24:41):
You know, you jump from one job seventy to eighty
thousand dollars in total compensation, that sounds great, Then you
find out that your new employer doesn't cover nearly as
much of your health insurance and doesn't provide a four
to one k match, you might be making less on
a net basis for your long term growth.
Speaker 3 (24:56):
Really important.
Speaker 4 (24:57):
I had a conversation with mccla who runs a company
and covers one hundred percent healthcare covers full benefits, and
heard he had an employee that was requesting a raise,
and that was one of the pieces that he actually
had me dig up and do some research. He knew
that it was a tremendous benefit that he was offering,
(25:19):
but he wanted to get a sense for you know,
what is your company cover, what do others out there
in Massachusetts cover? And you know it ranges from seventy
eighty percent depending on your employer out there. So this
one hundred percent benefit for a family, you're talking about
thousands of dollars of benefit that someone can access. So
all those things are really important to understand. Every company
(25:39):
has their own bells and whistles, and it's helpful just
to get a sense for looking else what else is
out there? Are you underpaid overpaid? Doing that search, get
a sense for what the market is for your services.
And you could find yourself that maybe the grass isn't
always greener on the other side when you do that search.
Speaker 2 (25:56):
Yeah, and people have been finding that recently, both where
they are on the other side unfortunately recently. According to
Bloomberg and Connor Sen, New York can show the US
how to build more housing, will they, Paul.
Speaker 4 (26:09):
Doubtful, but I do I Connor Send does some really
good pieces at Bloomberg. I think we've had him on
the show before too, but really has some good context
to the real estate industry in general and the trends
in the different parts of the country. Sure, the Southeast
is an area. The southeast and Southwest have been areas
where we've seen a significant boom in construction over the
(26:31):
course of the last couple of years. What has been
consistent during that period is the Northeast being just absolutely
atrocious in terms of its sluggishness on construction. And this
dates back decades. Really, it's not even a phenomenon over
the last four or five years. What he mentioned in
this piece is the proposal that I believe is going
to be signed into law later this month through New York,
(26:52):
where eighty thousand housing units would be added through permits
to add accessory dwelling unit on lots that were intended
for one to two family, single family to too family
residents out there. So basically, this idea that more duplexes
and more triplexes would be built in certain areas of
New York a big initiative to do yimby instead of nimby.
(27:18):
So yes in my backyard rather than not in my backyard.
But you can, you know, change the zoning restrictions and stuff,
but it's not always a home run in order to
have more housing construction.
Speaker 2 (27:31):
Yeah, yeah, I'll just tell you. I think that there
are some things that are going to work pretty well.
But unless areas are really willing to take the carrot
and stick approach, I just don't see it happening in
the Northeast. So I'll give you a recent example. The
carrot and stick approach has been attempted here in Massachusetts.
I would argue without a big enough carrot or stick
(27:52):
with the MBTA zoning laws not familiar, not for Massachusetts.
You know, housing's outrageously expensive here. I think you're probably
aware of that, and the legislature basically passed a rule saying,
if you're serviced within a certain distance of the MBTA
commuter rail train station, bus station, then you have to
have a certain quantity or percentage. I don't remember how
(28:13):
they did it of multi family housing, but the stick
doesn't really work. Their only option is to really sue
towns over this if they propose to pass it.
Speaker 3 (28:23):
My hometown.
Speaker 2 (28:24):
My hometown, the legislature in the town passed zoning rules
to adhere to this.
Speaker 3 (28:30):
And actually exceeded it immediately.
Speaker 2 (28:34):
Ballot initiative got enough signatures where the town of Needum
is now going to vote on this, probably to overturn
their willingness to comply with the zoning rule, which I
personally completely disagree with. I am totally fine with us
developing a bunch of multi family housing in the center
of town to frankly bring down the cost of housing
in New England. And it's not as though our town
(28:56):
is having to put up money. They're just having to
zone it for the possibility if somebody's developed multifamily. But
housing is local, and I am seeing it over and
over again where even when the town legislature votes to
approve this type of thing, the voters come NIMBI comes
out and they say I don't want my town to change.
I don't want to look different, feel different. I don't
(29:18):
want new people in it, and I'm voting to overturn it,
which I find disappointing. But is the reality that a
lot of these towns are similarly.
Speaker 4 (29:24):
I've had it on the other side where my sister
works in commercial real estate, and there's been banter about
this idea of converting office spaces into residential units in
the city of Boston, and that one she has informed
me that from a cost perspective, it's extraordinarily expensive to
undergo that endeavor. And secondly, the sort of caveat with
(29:46):
that is a certain percentage of that housing you get
a break on your property taxes. That's the big incentive
that Boston was mentioning with this conversion for fifty years,
a really long period of time. But a certain percentage
of your units have to be actually horrible housing. And
her point was from a profit margin standpoint, a commercial
real estate developer is not going to go in there
and spend millions of dollars to rehab units and then
(30:08):
have twenty to twenty five percent of their units not
be significantly profitable. I mean, that's just the numbers of it.
Not to say, from a social initiative side of things,
it's not, you know, a bad thing, but the economics
don't line up.
Speaker 2 (30:21):
Can make money elsewhere. Let's take a quick break. When
we come back, we's talk about the piece of legislature
working its way through Congress on social security might apply
to you. Stay tuned, we'll cover that next here on
the Financial Exchange.
Speaker 1 (30:33):
Thanks to US six one, seven, three, six two thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network,
Business and financial news affecting the markets and your wallet.
We've got it all straight from Wall Street right here
(30:53):
on the Financial Exchange Radio Network.
Speaker 3 (31:00):
MarketWatch has a piece this morning.
Speaker 2 (31:04):
The Social Security Fairness Act is incredibly irresponsible.
Speaker 3 (31:08):
It's define what the heck this is?
Speaker 2 (31:09):
First and foremost, there are two laws out there that
can affect some people's social security. That would be the
Government Pension Offset the GPO and the Windfall Elimination Provision
the WEB, both of which are on the chopping block
right now. And why this author thinks they're incredibly irresponsible?
I tend to agree with is because you would be
giving a whole bunch more in Social Security benefits out
(31:31):
without raising revenue at all. And if we know one
thing about Social Security, it's that it's about to go
bust in about eight years. And so if you did
this without raising revenues in any way, guess what you're
gonna make it go bust faster.
Speaker 3 (31:44):
That haven't been said.
Speaker 2 (31:45):
I think there are some reasonable complaints about the rules
that affect Social Security, specifically on the windfall elimination provision side,
in my opinion, So if you're not familiar, let's say
you were a teacher for ten years and then worked
in other twenty years in the private sector, and therefore
this is specific to mass Chusetts and a number of
(32:05):
other states. But during that ten years as a teacher,
you did not pay into Social Security. You are eligible
for a pension from the Commonwealth of mass Chusetts in
that case, and because you did not pay into Social
Security for a full thirty years, that pension is going
to partially offset your Social Security benefits. And in my mind,
that's kind of ridiculous because your Social Security benefits are
(32:28):
already accounting for the fact that you didn't work thirty years.
They are lower because of that fact, and your pension
is lower because you only worked ten years for the
Commonwealth of mass chusets.
Speaker 4 (32:38):
Yeah's it gonna be a big pension.
Speaker 2 (32:40):
So I kind of look at those rules and say,
is this really accomplishing what we wanted it to accomplish,
or is it just making it so people don't really
have job mobility the government pension offset. On the other hand,
I think there's a lot of good reasons that this exists.
So to explain this one, I'm just going to use
an example, and I'm going to try and create a
boogeyman here. So let's say that you worked long and
(33:01):
hard in your career with the Massachusetts Department of Revenue.
You were collecting taxes for the Commonwealth of Massachusetts. You
can guess why I'm going down this road for the boogeyman.
And you are therefore eligible for a pension from the commonwealth,
and you are not eligible for any Social Security because
you didn't pay into soci Security. You didn't work, You
(33:21):
didn't pay into Social Security for any period of time,
but your wife did. Your wife worked thirty years in
the private sector for take your pick. Gillette, big Massachusetts company,
and therefore you are eligible for half of her Social
Security benefit under the government pension offset. You don't get
that because you've got this pension, you had your own work,
You've got your pension. That's not what it was designed for.
(33:43):
They want to get rid of that, and I think
that's I think that's kind of silly that, hey, I'd
be able to collect spousal benefits from my spouse's work
at the same time as collecting a robust pension from
the other side for my own work. That seems kind
off to me. And that's not why the spousal benefit
was created. The spousal benefit was created to compensate people
who worked in the home during their lifetime. And so
(34:05):
I think it's a little bit more nuanced than just saying, hey,
we need to do away with these rules because they're
unfair and give more people more Social Security benefits at
the risk of making the program go belly up faster.
But I also think it's pretty likely that this could
get passed and these things do go away. And what
I would say to you is that if you are
working in a role where you are eligible for a
(34:26):
pension from the federal government from the state government, and
you haven't really thoroughly understood how it's going to affect
your Social Security benefits or looked into tactics where you
can increase your total retirement income. Right if you've been
working for the state of Massachusetts for thirty five years
and you've maxed out your retirement benefits there, it could
make a lot of sense for you to go find
even a part time job elsewhere in order to get
(34:48):
paid into Social Security for long enough to collect. If
you have questions along those lines, you're not really sure
how these things are going to affect your retirement benefits,
please give the folks at Armstrong Advisory Group a call.
We work with a number of people in all different
sorts of roles here who have been affected by the
WEB or the GPO, and we can help you maximize
those benefits and most importantly plan them out so that
(35:11):
it's all accounted for properly in your personal financial plan.
You can call our office at eight hundred three nine
three four zero zero one the Armstrong Advisory Group. We
offer free appointments across New England for folks that want
to sit down and really dig into their personal financial situation,
and again that number to talk to somebody and book
your appointment now is eight hundred three nine three for
(35:34):
zero zero one.
Speaker 1 (35:35):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (35:51):
Paul Black, Friday has come and gone. Cyber Monday has
come and gone, which means it's the most wonderful time
of the year for people that love of stealing packages
off of your front porch, those porch pirates, and there
was a new product out there just for you.
Speaker 1 (36:07):
You know.
Speaker 2 (36:07):
First thing that I think we started doing in reaction
to this was some sort of lock box or you know,
I've seen the ability to instruct the delivery driver to hey,
put this thing on my back porch because I don't
want I don't want to get and stolen right off
of there. Anyone that's lived in Somerville, Cambridge, Boston, Medford,
you know, or really anywhere around a major city across
(36:28):
the country has had probably something attempt or successfully get
stolen off of their porch, so I can I can
feel this one. Then we had the smart doorbells, so
I've got a couple of those on my house where
I can at least see the porch pirates steal a
thing directly from me. That doesn't really help because they're
usually wearing a mask of some sort, so I can't
properly identify that person, but I can actually watch you
(36:50):
steal my product. Now we've got porch Pirate insurance, and
I wish there was a P letter word for insurance
that we could really, you know, dive in touch Porsch
Pirate protection. I like that triple P for folks that
want to protect their packages from being stolen or at
least ensure them. For one hundred and twenty dollars a year.
(37:12):
You can get porch Pirate protection for.
Speaker 4 (37:15):
Three claims a year and up to two thousand dollars
of stoven stolen delivery.
Speaker 2 (37:19):
This is not going to work for your house, Paul,
you have a new three packages at your door. I
would be willing to bet that you average more than
two packages at your door every single day in the
month of December.
Speaker 4 (37:30):
Oh yeah, absolutely, I mean, Chuck and I once did
a exploration on how many Amazon orders we had over
a calendar period, and I believe my househol was three sixty.
It was almost one a day. It averaged out too.
Speaker 1 (37:42):
I think I'm both of time.
Speaker 2 (37:43):
See, I can't track this easily because my wife and
I have we share an Amazon Prime account, but we
have separate logins, so I don't know what she's getting shipped.
I'll I'll have to look into this and get back.
Speaker 4 (37:52):
I'll run back the numbers for the second hour, but
I'm pretty sure that's where we came at. Luckily, in
the burbs, knock Wood, you don't have to worry. As
the city. I had it every single time, and if
I had valuable stuff, you got to send it out
to the burbs.
Speaker 2 (38:06):
So get your porch pirate protection. Let's take a quick break.
When we come back, we'll have a full market recap.
Markets have turned negative around the eleven o'clock hour and
a lot more to cover next on the financial exchange,
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com