TRANSCRIPT
here to walk through some good stuff today we’re going to have some fun things to talk
about and we’re going to go through the top 10 economic indicators that you as investor
should follow good morning Mr Ron good morning Mr Jeff you know what it’s funny you ask six
economists what’s going to happen six months from now you get six different answers and you
ask them what their models are there’s there’s hundreds of these economic indicators but it’s
amazing how Financial media kind of hones in on four yeah exactly so we’re going to hone in on
10 honestly these are ones that we almost always follow on our show we report on as they come out
so I think this is the stuff I consider important it’s the things I look at and if you look at uh
places like briefing.com these are the ones that have the highest impact on the market
they’re not ones that people look at and go when it comes to that okay let’s let’s kick this puppy
off let me share my screen with everybody and we’re gonna start off with some did you knows
uh that I had actually put together about a week or so ago we just weren’t able to spend time on
them can you see that on your screen there I can all right I had a guinea pig when I was younger
did you know that that Switzerland prohibits the ownership of just one guinea pig so there are no
lonely guinea pigs in Switzerland I wonder if it’s a religious thing I don’t know or it’s just hey
it’s the guinea pig Lobby the Pet Shop Lobby of trying to force you to have 100% more guinea pigs
okie dokie human teeth are the only part of the body that cannot heal itself I did know that so
dentists will always have a job no matter what and AI will not take their job away no and that’s why
implants are so popular because once you lose your enamel you’re done yeah and you get it back with
the implants we are more creative in the shower there’s a lot of ways I could take that one I know
now I I am able to sing as well as Billy Joel in the shower which is good now from a writing
standpoint I will say I am a little less creative when I drag my laptop into the shower with
me I gotta I I I will tell you tone deaf you don’t want to hear me sing in the shower as
long as you’re by yourself oh excuse me you don’t want to hear me sing at all let alone
shower okay now this is funny I got this from a a website called we are teachers and I’m like
you aren’t very good spellers but Fruit Loops are actually all the same flavor despite the
the the color of that you know what I thought I knew that I used to like Froot Loops when I
was younger I was always a Frosted Flakes guy y but we sprinkled in some Froot Loops and Sugar
Smacks now and then I was I hated Captain Crunch I didn’t do raisin brand I didn’t do any of those
what were your favorites I was a Captain Crunch guy when I was really young and then I shifted
to shifted to raisin brand of all things the only problem with raisin brand is you
just got to shovel it down really fast because otherwise it gets all mushy and disgusting hey
I’m not afraid to say I got a box of Frosted Flakes in my pantry right now hey you know
what you never go away comp I am a Leo so I am king of the jungle Tony the the tiger isn’t so
bad either competitive art we’re coming up to the Olympics competitive art was once
an Olympic sport so I put that in with I don’t know what the hell competitive art
is yeah rhythmic gymnastics all right first person to draw me a stick figure a Jeff wins
yeah so was it a Time timing thing or had to be judgmental who the hell knows yeah I really don’t
know me I’m have to look that one up yeah that it’s interesting to me and I don’t know when it
left the Olympics I’m assuming this was one of the early on things or whatever but all right
let’s get to the top 10 economic indicators that investors should follow surprised this is number
10 are these in order and these aren’t in any specific order oh they’re not okay except for
the last one I I put the last one because I think right now I I don’t particularly braid it as the
top thing but I think right now it should be or it is on everybody’s mind number 10 on our list
GDP so gross domestic product this provides the overall value of goods and services that
the economy produces and it indicates whether we’re slower or we’re slowing or growing at
that point it tells us that yeah this is a component of leading economic indicators as
well which is interesting because it’s a lagging indicator Ator of course it is but it’s measured
in leading economic indicators which yeah once again I’ve never understood it because it’s always
looking back up to they’re always revising yeah um employment figures this hasn’t been a major issue
for a few years but I think it’s going to become more important as we get farther and farther into
um what we’re seeing the cracks that are showing up there um this is monthly comes out uh usually
it’s about the what second weekish that we get this no first Friday of every month okay first
Friday of every month and it depends because if the first Friday is the first or second
then sometimes it goes the next Friday I forgot what the provision was for that it’s definitely
the most important thing because that’s what’s really holding up the economy right now if you
look at a lot of the economic numbers they’re actually somewhat poor or declining and the
employment figures have been strong although weakening a little bit we’re back up to above 4%
at at this point so it’s starting to that starting to become a factor uh industrial production so
this is how much production as a measure of output of manufacturing industri so this included this
includes producing goods for consumers and for businesses it’s the monthly uh released from
the fed and it reports on capacity utilization in the factory sector so extremely important because
this can also be an indicator of what the job situation is GNA I think that’s the PMI too
yeah absolutely so it’s an important figure and a lot of times it leads in there a little bit
all right next one in line consumer spending so this accounts for 23ds of the US gross
domestic product and it’s a good gauge of whether the consumer is spending uh it’s
monthly and it lays out personal income it provides data on consumer spending
it also provides inflation through the consumer or through a price index once
again another thing that it’s one of those things where you start to see all right if
there’s unhealthiness in the industrial sector people are getting uncomfortable with either
the economy or their job situation you can see that that pullback in consumer
spending all right next one in line home sales now why is this a big thing it’s a big thing because
the home sector drives a lot of the other sectors the home sector can drive there’s more home sales
that means the Home Depots and the lows of the world can increase it means that durable goods
like refrigerators and all the other appliances in your kitchen are all going to potentially go
up because people are shifting to new homes they may be updating either in an existing
home or in a new home of course that’s sold as more of a wholesale product what’s your thought
there look in my lifetime home sales and home pricing has only drastic the drastically affected
the economy in the markets twice yeah once in the late 80s early 90s and obviously 15 years
ago right now there I think that this is just a bunch of propaganda from the real estate people
saying oh yeah interest rates are they they don’t know if interest rates are coming down
because obviously the high mortgage rate is is impeding people from from buying house I know in
my neighborhood there’s still five or six houses up for sale house across the street has been on
and off the market for a year but people will look at this as a way of our people spending and look
new home sales we we talked about this before has been unbelievable right because there’s
not enough inventory of used houses or just existing homes right not used but existing homes
so people are buying new yeah so I think it’s an important factor but but our lifetime only twice
has it drastically affected yeah where where it drastically went down I I think it’s likely
that prices will pull back at some point but for right now with rates where they’re at somebody
that’s like me that’s sitting on a 3% mortgage or 2.75% mortgage I’m not going anywhere why would I
at this point I’m happy with my house and until I decide to move to a different state I’m most
likely not going to sell my house even though it’s bigger than I need yeah I’m just not g to
sell it I was just about to say unless you were going to downsize Y and then you wouldn’t have
a mortgage probably because you’re going to buy a lesser valued home and that’s likely what’s going
to happen for us anyhow because we I I don’t need a big house house and it’s just two of us we’re
we’ve got probably about 1,500 square feet too much for us right now as it is that’s really what
we’re looking at in the future but until things pull back I’m not going anywhere I thought you use
said 1500 square feet of space for your podcast Studio I do use it for a podcast studio and now
I’ve moved another room in the house into a video studio so I’ve got the space and I’m not using it
for other purposes so my office became a video Studio why not all right home building so this
is related this is more on the new side and it’s an indicator of okay how especially with
the builders how much risk are they will to take by throwing more houses out on the market I think
at this point they can pretty much put as much as they want out on the market and they’re going to
pretty well sell it there was a little bit of a a Slowdown I know from talking to my realtor
buddies there was a little bit of a Slowdown early on in that that first part of the interest rate
raise and then now home builders are back to building they’re just not building at the pace
that they were before and it’s summertime yep yeah but really for this year yeah they really
not been building at that pace construction spendings also in these are all interrelated
but how much is construction spending going on and this is all the different stuff related to
it such as labor materials engineering work all of that falls in here and it’s residential and
nonresidential public and private construction so it’s a view of all of this together yeah all
right manufacturing demand so Rel related to the industrial production manufacturing demand this
is the report on how much the manufacturers are shipping their inventories and orders as a demand
for manufactured items so this is um monthly report but there’s a more lengthy followup
usually the the following month that kind of give it an update and there may be some adjustment in
there yeah all these things are interrelated it’s just a matter of the in you see the headline
number I lost your sound things have you know different ways on how the sausage is made but it’s
all tell it’s all telling you a story yeah it is and I think the most important thing that I would
tell from this is there is just no one or two of these or as the news media gets where it’s one or
two and then they focus on those nonstop it’s you get a picture of the tapestry when you look at all
of these together well earlier you had consumer spending yep retail sales is a separate number but
that’s part of consumer spending yeah and it but it’s all related to that retail and food service
so it’s a little bit more of a deep dive into specifically the retail environment if I remember
correctly I don’t I can’t remember if or not that this includes like online sales and stuff like
that I think it’s all I believe it does yeah they they changed that about 10 or 15 years ago where
they included retail sales obviously it’s as long as those companies are reporting yeah which I’m
sure is a little bit tougher Amazon and Walmart I’m sure it’s pretty easy for them to report yeah
exactly because it’s just total sales for them they’re the two biggest out there yep all right
last one is inflation and I think this is the one that that both the media is focused on I think
it’s a an election issue right now or tonight you’ve got the presidential debates I’m sure this
is going to be one of the top two or three topics that are in there when inflation comes in via the
Consumer Price Index the producer price index and the one that you know really I never paid
attention to much but the FED has really narrowed in on that they use as a major factor is the PCI
so personal consumption expenditures which I think is funny because I think pce they pretty much they
once again just like CPI they remove food energy because they say it’s so volatile that they can’t
track can’t track it I’m like I think that’s probably two of my largest expenditures that
I have is food and energy but just saying yeah and you know what I never understood this and
this is a separate conversation but going back to when we were kids and inflation was skyrocketing
and yeah it’s fluctuated up and down they said no you you need at least two or 3% inflation every
single year like why can’t prices just stay the same yeah that’s because public companies they
got to do better than last quarter they’ve gotta increase prices people want raises you got to do
improvements and upgrades to facilities and Manufacturing so pric has got to go up every
single year I always talk about you ever see Oreo cookies they’ve gotten smaller yeah right Bazooka
Bubble Gum used to be this nice big piece then they smaller then they put ridges in it so it’s
the same size but it was less bubblegum of course I only hone in on the important thing but the
idea is that why why can’t prices go down oh stagflation is bad deflation is bad why if people
aren’t going to get raises every single year or every other year then why do prices money through
education or being more educated or whatever why can’t prices stay the same yeah or why can’t they
go down at times with it being with it not being a bad thing right overall you see the price of a car
forget about new used cars new cars are insane I don’t look you gotta replace your car now there’s
at some point you replace all the parts you bought another car yeah but who conj justable what’s the
average cost of a car 50 to 60k yeah yeah and the other part of it is okay so it’s 50 or 60k
the first year you buy that thing it’s going to drop off about 20 to 25% of the value easy yeah
I haven’t bought a new car and I I don’t even remember the last new one probably 2007 yeah the
last new car I bought CU I buy them typically three or four years old they last forever and
they’re built to last and you took the premium out all that premium has gone at that point and I just
have the car and I’m fine with it I I just don’t understand it and I think the interesting part is
the move towards you know electric vehicles I’m like yeah but they’re like insanely expensive on
top of that yeah but I think you got to look at the cost of the Savings in gas and you don’t need
to worry about the the fluctuation in gas I’ve had several people that love their EVS yep and they
swear by them and many of them have said the car has already paid for itself within five years I
I’m sure honestly I’m sure it has the maintenance is nothing on them you don’t have to do much in
the way of Maintenance they don’t really wear out ever besides the batteries eventually tires
normal maintenance yeah yeah just barely normal maintenance but you’re not having to change oil
and all that so I think from that perspective yes but I just did a 10 hour or 10 half hour
trip back and forth to New Mexico I could not have done that in a electric vehicle no you you still
stopped for gas though I stopped for gas for five minutes and the problem was there were points in
time where it was like okay we’ve got a plan this is rural Texas and Rural New Mexico that we were
going to we were barely find in gas stations and I did not find or see one single electric vehicle
charger in that entire 10 and a half hour trip you know what they’re there you didn’t know where they
were you’d be surpris where they on the map but an EV could go up to 300 miles and actually they’re
working on ones that are now 400 so if you’re gonna stop for gas every 300 something miles
in EV you stop every 275 to 300 but you know what they got the fast charging stations now it’s not
going to take five minutes but it’ll be less than 10 or 15 no they won’t not faster the fast
charging ones now are pretty quick really now yeah oh you’re not sitting there for two hours now yeah
that’s not happening I’m not sitting there for 10 minutes I stop in get gas and I’m going buddy I’m
stopping to go to the restroom I’m filling the truck up but if it could but it could save you
three or $4,000 a year would you wait an extra five 10 minutes no absolutely not absolutely not
all right those are those are good 10 let’s go back those are good 10 economic indicators you
hit all the the core ones there are others we’ve covered some of the other ones but those are the
10 core ones the ones you should watch it’s the ones that you should keep your eyes on and it
helps you to weave that tapestry of what you’re looking at from where the economy is going luckily
if you don’t want to do that just continue to watch the show because we share these with you as
they come out almost every week there’s some one of these economic indicators will be on that list
and hold on real quick and as a segue in a tease I have the ultimate economic indicator in the next
podcast what okay then you’ve gotta watch the next was gonna share it now but it’s a good one
all right I love it it’s not the underwear it’s not the underwear index oh man come on you haven’t
done that we already covered that one before all right folks that’s why we do these shows for you
make sure that you subscribe to the channel make sure you give us an upvote let us know that we’re
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