JOINING ME IN THE CENTER RING IS A TRUE NUMBERS GUY.

JUSTIN BLEOSCH IS ASSISTANT PROFESSOR OF ECONOMICS AT CORNELL UNIVERSITY WHO IS HERE TO HELP US LEARN MORE.

WELCOME PROFESSOR.

>> THANKS FOR HAVING ME.

>> THANKS FOR COMING ON THE SHOW.

LISTEN, WE ARE TRYING TO FIGURE OUT WHETHER, IN FACT, AMERICA DID HAVE THAT SOFT LANDING EVERYONE HAS BEEN TALKING ABOUT.

SO I WOULD LOVE TO HEAR YOUR THOUGHTS.

>> YEAH, I THINK THE ANSWER IS MOSTLY YES.

SO WHEN WE ARE TALKING ABOUT INFLATION, LET'S JUST BE CLEAR ON THE DEFINITION.

WHEN ECONOMISTS ARE TALKING ABOUT INFLATION WE TALK ABOUT PRICES RISING.

SO OVER THE PAST FEW YEARS PRICES HAVE RISEN A LOT.

THERE WAS INFLATION AND INFLATION HAS COME DOWN.

JUST BECAUSE INFLATION HAS COME DOWN DOESN'T MEAN THAT PRICES WILL GO DOWN.

PRICES HAVE RISEN BUT THE PRICE PACE GOING UP HAS SLOWED.

>> WITH THE PACE SLOWING, THE AVERAGE AMERICAN, THAT'S DIFFICULT.

WHAT NUMBERS CAN WE LOOK AT TO GET SOME HOPE THAT THINGS ARE GOING TO GET BETTER ON THE HORIZON?

>> SO INFLATION IS DOWN BELOW 3% AT AN ANNUALIZED RATE RIGHT NOW.

WHAT THE REALLY GOOD NEWS IS THAT THAT'S LESS THAN WAGE GROWTH WHICH IS 3 TO 4% A YEAR.

SO FOR MOST PEOPLE, FROM HERE ON OUT, YOU SHOULD EXPECT INCOMES TO GROW FASTER THAN PRICES.

>> I'M TRYING TO THINK AT IT FROM THE REALITY OF THE SITUATION.

THE NUMBERS HAS INDICATED THE ECONOMY IS COOLING OFF A WILLINGS BIT, WHICH IS GOOD FOR CONSUMERS BUT THE AVERAGE CONSUMER IS PAYING A HECK OF A LOT MORE.

SO THE QUESTION IS, DO YOU THINK THE PRICES ARE EVER GOING TO GO DOWN OR IS THAT JUST GOING TO LEVEL OFF?

>> THERE MIGHT BE SOME SECTIONS WHERE PRICES COULD GO DOWN, BUT ACTUALLY IN THE SECTORS WHERE YOU WOULD EXPECT IT, WE HAVE SEEN IT.

GAS PRICES HAVE COME DOWN, USED CAR PRICES HAVE COME DOWN AS WELL.

BUT FOR THE MOST PART, NO, I MEAN WE ARE ON A LOWER GROWTH PATH BUT I WOULDN'T EXPECT PRICES TO COME BACK DOWN FROM HERE.

>> SO YOU ARE A NUMBERS GUY.

SO YOU LOOK AT THINGS ON PAPER AND YOU MAKE YOUR CONCLUSIONS AND THAT'S PERFECTLY UNDERSTANDABLE.

NOW TRY TO GIVE SOME COMFORT TO THE AVERAGE AMERICAN WHO IS TRYING TO MAKE ENDS MEET AND ARE JUST NOT SEEING IT.

SO WHAT HOPE CAN YOU GIVE THEM OR WHAT NUMBERS CAN YOU GIVE THEM SO THAT IT CAN START LOOKING AT THINGS AND SAY OKAY THERE IS SOME LIGHT COMING INTO THIS SITUATION FOR THEM?

>> YEAH, THE GOOD NEWS IS THAT THE GENERAL MARKET IS PRETTY STRONG.

THE UNEMPLOYMENT RATE IS 4.1% RIGHT NOW WHICH IS HISTORICALLY VERY LOW JOB OPENINGS IS RELATIVELY HIGH.

IT'S NOT LIKE IT WAS TWO YEARS AGO IN 2022, THE LABOR MARKET WAS REALLY TIGHT.

EMPLOYERS WERE VERY DESPERATE FOR WORKERS AND WERE OFFERING VERY HIGH SALARIES.

THAT, THOSE SALARY LEVELS ARE STILL THERE.

THEY'RE STILL HIGHER AND THE JOB MARKET ISN'T AS STRONG AS IT WAS TWO YEARS AGO BUT OVER THE COURSE OF HISTORY, THE UNEMPLOYMENT RATE BEING NEAR 4% IS VERY LOW SO RELATIVE TERMS, A PRETTY GOOD TIME TO FIND A JOB.

>> SO NOW I UNDERSTAND WHAT YOU WERE SAYING EARLIER THAT WAGE GROWTH IS GROWING AT A BETTER PACE NOW THAN INFLATION SO THEREFORE, YOU GET A SLIGHTLY MORE BANG FOR YOUR BUCK BUT A LOT OF PEOPLE ASK ME AND WE HAVE BEEN TALKING ABOUT IT A LOT THIS WEEK, IS THERE ANY SECTOR OF THE ECONOMY WHERE YOU SEE PRICES ACTUALLY POSSIBLY START GOING DOWN OTHER THAN FUEL?

YOU MENTIONED FUEL COSTS BUT FOR EXAMPLE, GROCERIES?

GROCERIES ARE STILL A LOT HIGHER THAN THEY WERE.

ANY CHANCE SOME SECTORS OF THE ECONOMY MIGHT START SEEING THE COSTS NOT JUST LEVEL OFF BUT START COMING DOWN?

>> NOT THAT I WOULD SEE.

I COULD SEE FOR FOOD IN PARTICULAR THEY COULD LEVEL OFF AND LEVEL OFF FOR A LONG TIME.

AND THEN SO AS PEOPLE'S INCOME RISE OVER TIME, FOOD WOULD GET RELATIVELY CHEAPER BUT I DON'T THINK THERE ARE A LOT OF SECTORS WHERE THERE IS DEPLAGUES LEFT.

>> DEFLATION LEFT.

>> WHAT WOULD YOU LIKE TO SEE THE NEXT ADMINISTRATION, WHETHER IT BE HARRIS OR TRUMP DO TO POSITIVELY IMPACT THE ECONOMY?

AND IF YOU WANT TO, TELL US WHAT PROGRAMS THEY DID PROPOSED THAT YOU THINK WORK AND WHAT MIGHT NOT WORK?

>> I MEAN I THINK THERE IS A LONGER COST OF LIVING ISSUE.

AND I THINK IF YOU THINK ABOUT HOUSING, IF YOU THINK ABOUT CHILD CARE, THOSE ARE REALLY BIG CHUNKS OF PEOPLE'S BUDGETS.

HOUSING IS EXPENSIVE BECAUSE IT'S HARD TO BUILD AND CHILD CARE IS JUST SORT OF INHERENTLY EXPENSIVE.

IT TAKES A LOT OF TIME AND YOU NEED TO PAY PEOPLE WAGES TO DO THAT WORK.

SO I THINK PROGRAMS THAT COULD INCREASE SUPPLY OF HOUSING AND ALSO SUBSIDIZE CHILD CARE COULD GO A LONG WAY TO MAKING THINGS MORE AFFORDABLE.

>> OKAY, LET'S TAKE ONE PROGRAM FROM EACH OF THEM IN OUR TIME WE HAVE LEFT.

IF YOU CAN BRIEFLY COMMENT ON THEM.

HARRIS IS PROPOSING A $25,000 CREDIT FOR INDIVIDUAL TO BUY HOMES.

THAT THAT POSITIVELY OR NEGATIVELY IMPACT THE HOUSING MARKET?

>> IT WOULD MAKE BUYING A HOUSE EASIER FOR FIRST TIME BUYERS BUT PROBABLY A LITTLE HARDER IF YOU ARE SELLING A CURRENT HOUSE AND YOU ARE NOT A FIRST-TIME HOME BUYER.

IF YOU SUBSIDIZE DEMAND AND YOU DON'T CHANGE SUPPLY, THEN IT IS PROBABLY GOING TO PUSH UP PRICES.

I THINK WHAT IS ENCOURAGING IS THAT THE HARRIS TEAM SEEMS TO PAIR THIS WITH SUPPLY SIDE MEASURES.

THE CREDIT, I THINK THE EFFECTS WOULD BE SMALL BUT INCREASING THE SUPPLY OF HOUSING WOULD IMPACT THINGS MORE.

>> HOW ABOUT TRUMP'S, ONE OF HIS BIG PROPOSALS TO HAVE A TARIFF ON GODS IMPORTED INTO THE U.S. THAT HAS BEEN TALKED ABOUT BEFORE.

20% TARIFF AND I THINK HE WAS TALKING ABOUT, HOW WOULD THAT SHORT-TERM AND LONG-TERM IMPACT THE ECONOMY IF YOU COULD BRIEFLY TELL US?

>> SURE, IN THE SHORT RUN IT'S PRETTY STRAIGHTFORWARD.

TARIFF MAKES IMPORTED GOODS MORE EXPENSIVE.

I KNOW THE TRUMP TEAM HAS BEEN SAYING THAT THE PEOPLE WHO SELL IT WOULD PAY THE TAX.

THAT'S LARGELY NOT TRUE.

IT WOULD BE MORE EXPENSIVE FOR CONSUMERS.

IN THE LONG RUN, A TARIFF TEND TO MAKES CURRENCY APPRECIATE SO THE DOLLAR WOULD BE STRONGER WHICH WOULD MAKE OUR EXPORTS MORE EXPENSIVE.

SO IT WOULD MAKE LIFE HARDER FOR AMERICAN EXPORTERS.

BUT IT'S NOT OBVIOUS THAT IT WOULD BRING PRODUCTION HOME.

IT WOULD MORE LIKELY JUST MAKE IT SO THAT CURRENT PRODUCERS IN THE U.S. COULD CHARGE PRICES BECAUSE THEIR FOREIGN COMPETITORS ARE SUBJECT TO A TAX.

>> SO THERE IS SO MUCH MORE WE COULD TALK ABOUT, BUT LIKE SOFT LANDING IS, I GUESS BEAUTY IS IN THE EYE OF THE BEHOLDER FROM AN ECONOMIST STANDPOINT, IT MAKES SENSE, THE AVERAGE WORKER, I THINK THE JURY IS STILL OUT ON THAT.

WE APPRECIATE YOUR INSIGHT JUSTIN.

VERY HELPFUL AND HELP SET THE TABLE FOR A NICE DISCUSSION COMING UP.

THANKS SO MUCH.

>> GREAT, THANK YOU.